Annual percentage rate (APR)

Annual percentage rate (APR) is the interest rate on a loan required to be quoted to a consumer seeking a loan in the United States.

Annual percentage rate (APR) is the periodic rate times the number of periods in a year. For example, a 5% quarterly return has an APR of 20%.

There are many ways of calculating the annual rate of return. If the rate of return is calculated on a monthly basis, we sometimes multiply this by 12 to express an annual rate of return. This is often called the annual percentage rate (APR). The annual percentage yield (APY), includes the effect of compounding interest.

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