Economics Personal Finance

Q&A: What is APR (annual percentage rate)?

APR (annual percentage rate) is usually a rate of interest tied to a liability (such as a loan or line of credit). When APR takes into account compounding and there is more than one period, it becomes APY (annual percentage yield).

Pro Tip: Credit card companies almost always advertise their rates in terms of APR, as it is lower than what the APY, or actual rate after compounding, will be.

Leave A Comment