Question

select the correct choice that completes the following sentence.
the effective interest rate that yields the total amount of interest generated over the course of 1 year is called the
loan
apy
period
apr

Explanation:

To solve this, we analyze each option:

• "loan" refers to borrowed money, not an interest rate measure.
• "APY" (Annual Percentage Yield) is the effective interest rate that accounts for compounding and gives the total interest over one year.
• "period" is a time interval, not an interest rate.
• "APR" (Annual Percentage Rate) is the annual rate without considering compounding effects over the year. So APY is the correct term for the effective interest rate yielding total annual interest.

Answer:

B. APY (assuming the options are labeled, but based on the dropdown, the correct choice is APY)