Mathematical finance | Interest rates
The term annual percentage rate of charge (APR), corresponding sometimes to a nominal APR and sometimes to an effective APR (EAPR), is the interest rate for a whole year (annualized), rather than just a monthly fee/rate, as applied on a loan, mortgage loan, credit card, etc. It is a finance charge expressed as an annual rate. Those terms have formal, legal definitions in some countries or legal jurisdictions, but in the United States: * The nominal APR is the simple-interest rate (for a year). * The effective APR is the fee+compound interest rate (calculated across a year). In some areas, the annual percentage rate (APR) is the simplified counterpart to the effective interest rate that the borrower will pay on a loan. In many countries and jurisdictions, lenders (such as banks) are required to disclose the "cost" of borrowing in some standardized way as a form of consumer protection. The (effective) APR has been intended to make it easier to compare lenders and loan options. (Wikipedia).
Annual Percentage Rate (APR) and Effective APR
The difference between APR and effective APR
From playlist Finance
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Courses on Khan Academy are always 100% free. Start practicing—and saving your progress—now: https://www.khanacademy.org/economics-finance-domain/core-finance/interest-tutorial/credit-card-interest/v/annual-percentage-rate-apr-and-effective-apr The difference between APR and effective AP
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