Which of the following statements, if any, is correct concerning the relationship between an effective interest rate and a nominal interest rate:

A: The effective rate is the rate the buyer will pay; the nominal rate is the rate named in the loan application;
B: The effective interest rate is always lower because the nominal interest rate includes charges other than interest;
C: The effective interest rate is the rate actually paid by the borrower for the use of the money; the nominal interest rate is the rate specified in the note;
D: None of the above is correct.

Answer: C: The effective interest rate is the rate actually paid by the borrower for the use of the money; the nominal interest rate is the rate specified in the note;