What is required in advertisements stating a finance charge?

When advertisements include a finance charge, it is essential to adhere to specific regulations to ensure transparency and clarity for consumers. The inclusion of the term "annual percentage rate" (APR) is a requirement because it provides a standardized measure that consumers can easily understand. The APR reflects the cost of borrowing on an annual basis, which helps potential borrowers compare different financing options.

By stating the APR in advertisements, lenders are acting in good faith and complying with legal standards that aim to protect consumers from misleading information. This practice fosters informed decision-making among consumers as they evaluate financing offers, allowing them to assess the true cost of debt more effectively.

The other options do not align with the established guidelines. For example, expressing the finance charge without regulations could lead to misinformation, while not mentioning downpayment amounts or focusing solely on monthly payments would not provide a complete picture of the financing terms offered. This highlights the importance of clarity and compliance in financial advertising, which is why the correct choice involves the requirement for disclosing the annual percentage rate.