annual percentage rate
(% APR)
   a unit used in the U.S. for stating interest rates and rates of return on investment. By federal regulation, these rates can be stated however a financial institution wishes, but they must be stated also in % APR so that consumers can compare rates of different loans and investment opportunities. Mathematically, the natural rate r of return on money is the "instantaneous" rate, the rate that allows for compounding of interest continuously. The APR is the percentage growth rate a of the money over a period of one year, as if interest were compounded annually. The two rates are related by the formulas a = er - 1 and r = ln (1 + a), where er is the natural exponential function and ln is the natural logarithmic function.

Dictionary of units of measurement. 2015.

Look at other dictionaries:

  • Annual Percentage Rate — ( APR) The APR is the interest rate figure that indicates the total cost of borrowing, including any charges. When you borrow money, every lender is required by law to quote this rate. The APR is the best way of comparing like with like. It was… …   Financial and business terms

  • annual percentage rate — ( APR) The total financing costs associated with a loan on an annualized basis, divided by the amount borrowed. As defined by Federal Reserve Regulation Z and the Truth in Lending Act, this is a precisely calculated measure of the cost of a loan …   Financial and business terms

  • annual percentage rate — A yearly interest rate that includes up front fees and costs paid to acquire the loan, calculated by taking the average compound interest rate over the term of the loan. Mortgage lenders are required to disclose the APR so that borrowers can more …   Law dictionary

  • Annual percentage rate — Parts of total cost and effective APR for a 12 month, 5% monthly interest, $100 loan paid off in equally sized monthly payments. The term annual percentage rate (APR), also called nominal APR, and the term effective APR, also called EAR,[1]… …   Wikipedia

  • annual percentage rate — noun : a measure of the annual percentage cost of consumer credit (as in installment buying or a charge account) that is required by law to appear on statements of credit accounts and is variously computed but always takes into consideration the… …   Useful english dictionary

  • annual percentage rate — APR The annual equivalent rate of return on a loan or investment in which the rate of interest and charges are specified in terms of an annual rate of interest. Most investment institutions are now required by law to specify the APR when the… …   Accounting dictionary

  • annual percentage rate — APR The annual equivalent rate of return on a loan or investment in which the rate of interest specified is chargeable or payable more frequently than annually. Most investment institutions are now required by law to specify the APR when the… …   Big dictionary of business and management

  • annual percentage rate — (Banking) percentage rate of yearly interest on credit and loans (according to the law the lender must indicate the rate), APR …   English contemporary dictionary

  • annual percentage rate — The actual cost of borrowing money, expressed in form of annual interest rate to make it easy for one to compare cost of borrowing money among several lenders or sellers on credit. Full disclosure of interest rate and other charges is required by …   Black's law dictionary

  • annual percentage rate — The actual cost of borrowing money, expressed in form of annual interest rate to make it easy for one to compare cost of borrowing money among several lenders or sellers on credit. Full disclosure of interest rate and other charges is required by …   Black's law dictionary

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