What format must the total cost of credit be disclosed in according to Regulation Z?

The total cost of credit must be disclosed in the form of the Annual Percentage Rate (APR) according to Regulation Z. The APR provides borrowers with a comprehensive view of the true cost of borrowing by representing the yearly interest rate, which includes both the nominal interest rate and any additional costs or fees associated with the loan. This allows consumers to easily compare different loan offers and understand how much they will be paying over the life of the loan. The emphasis on APR is intended to promote transparency in lending and help borrowers make more informed financial decisions.

While other options may pertain to aspects of lending, such as monthly payments or fixed loan amounts, they do not encapsulate the overall cost of credit in a standardized format that facilitates direct comparison between loans. Consequently, they do not fulfill the requirement set out by Regulation Z for disclosing the total cost of credit.