Investor Glossary-aprInvestor Glossary-aprInvestor Glossary-aprInvestor Glossary-aprInsightful stock market charts - Click here
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


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

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