By dividing the number of periods in a year in which it was used by the periodic interest rate, the annual percentage rate (APR) is derived. How frequently the rate is really applied to the amount is not stated.
The annual percentage rate (APR) is the term used to describe the annual interest that is generated by a payment that is paid to investors or imposed on borrowers (APR). APR, which is expressed as a percentage, represents the actual yearly cost of borrowing money throughout the life of a loan or the return on an investment.
This includes any fees or other transaction-related costs but does not take compounding into account. The APR can be used as a benchmark when consumers are comparing lenders, credit cards, or investment products.
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