APR (Annual Percentage Rate)

Definition

The annual rate charged for borrowing or earned through an investment. APR includes not just the interest rate but also other fees or costs involved in procuring the loan.

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APR Calculator

APR vs Interest Rate

Interest Rate: The cost of borrowing money.
APR: The cost of borrowing money + fees + points.

APR is a better measure of the true cost of a loan.

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Related Finance Terms

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1099 Form

A series of documents the IRS refers to as "information returns".

401(k)

A feature of a qualified profit-sharing plan that allows employees to contribute a portion of their wages to individual accounts.

Amortization

The process of spreading out a loan into a series of fixed payments over time. You'll be paying off interest and principal in different amounts each month, although your total payment remains equal.

Angel Investor

A high-net-worth individual who provides financial backing for small startups or entrepreneurs, typically in exchange for ownership equity in the company.

APY (Annual Percentage Yield)

The real rate of return on an investment taking into account the effect of compounding interest.

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This tool is for illustrative purposes only and does not constitute professional financial, tax, or legal advice. Calculations are estimates and may not reflect real-world variables or local regulations. Always consult with a qualified professional before making financial decisions.