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