What happens if the disclosed APR is closer to the actual APR than the permissible tolerances?

When evaluating the accuracy of the disclosed Annual Percentage Rate (APR) under Truth in Lending (Regulation Z), it is important to understand the concept of permissible tolerances. If the disclosed APR is closer to the actual APR than what is allowed by these tolerances, the disclosed APR is deemed to be accurate. This means that it falls within acceptable limits that regulators have set to ensure consumers are provided with truthful and reliable information regarding loan terms.

The permissible tolerance is essentially a margin of error that allows for minor variations between the disclosed and actual APRs, recognizing that absolute precision may not always be achievable in practice. If the disclosed APR satisfies these tolerances, it confirms that the lender has complied with the regulations, and consumers can rely on this disclosure for making informed decisions about their loans. Thus, option B accurately reflects this understanding, establishing that if the disclosed APR aligns closely with the true cost of borrowing as defined by the regulations, it can be considered accurate for all intents and purposes.