Investor Glossary-aprInvestor Glossary-aprInvestor Glossary-aprInvestor Glossary-aprInsightful stock market charts - Click here
investor
Categories    # A B C D E F G H I J K L M N O P Q R S T U V W X Y Z

APR

The HTML to link to this page
 

APR stands for Annual Percentage Rate. APR is a measure of interest paid for credit received (or earned on principal invested) that does not take into account the effect of compounding. Unlike APR, APY, or annual percentage yield, does account for compounding. For example, on a loan at a rate of 1% per month, the APR will be 12*1% = 12%, but the APY will be (1+1%)^12-1 = 12.68%. At 2% per month, APR is 24%, and APY is 26.82%. The higher periodic rate and the more periods in a year, the larger the gap between APR and APY. APY is more economically meaningful than APR. Nevertheless, federal law requires banks, credit card issuers, and other consumer finance entities to disclose APR to the borrower. On the other hand, the higher APY figure is always reported rather than APR when depository institutions advertise rates on savings products such as certificates of deposit and money market accounts.



Rate this APR definition...

Learn about investing with the Investor Glossary Term of the Day


Click here for insightful stock market charts. Where is the market headed? The answer may surprise you. Find out
with the exclusive & Barron's recommended charts of Chart of the Day.


Popular Terms: stock market close, 1031 exchange, risk management, ex-dividend date, average price per share, Zero Cost Collar, 1035 exchange, implied volatility, option premium, inflation, debt service coverage, real GDP, phantom income, class C shares, labor relations, current ratio, covered put, irrevocable trust, annual return, ex-dividend, FICO score, APR, Key Rate Duration, margin rate, FTSE, command economy, LIBOR, 144a, stock split, open position, dividends payable, balance sheet, reverse mortgage, VIX, liquidity ratio, EBITDA, 401a, required rate of return, deferred revenue, diluted share, per diem, minority interest, in escrow, retained earnings, wholly-owned subsidiary, deferred tax, cancelled check, limit order, quality assurance


Accounting | Banking | Bonds | Brokers | Economy | Futures | Mutual Funds | Options | Real Estate | Retirement | Stocks | Taxes | Technical Analysis
Investor Glossary | Term of the Day | Suggest a Term | Chart of the Day | Dogs of the Dow
©2004-2016 Investor Glossary - All rights reserved - Terms of Use