Finance charges must be stated in which of the following?

Finance charges must be stated as an annual percentage rate (APR) because the APR provides a standardized way to express the cost of borrowing money on an annual basis, allowing consumers to easily compare different financing options. The APR includes not only the interest rate but also any fees or other costs associated with the loan, thereby presenting a comprehensive view of the cost of credit. This format follows consumer protection regulations and ensures transparency in lending practices, helping customers make informed financial decisions.

On the other hand, monthly installments reflect payment amounts rather than the cost of borrowing itself, fixed dollar amounts do not convey the variability of interest costs, and a simple interest rate does not account for additional fees or the compounding of interest over time. Hence, only the APR gives a full picture of the financial charges applicable to a loan.