Annual percentage rate (APR) refers to the yearly interest generated by a sum that's charged to borrowers or paid to investors. APR is expressed as a percentage that represents the actual yearly cost of funds over the term of a loan or income earned on an investment. This includes any fees or additional costs associated with the transaction but does not take compounding into account.
The annual percentage rate (APR) can be calculated following this formula :
Annual Percentage Rate (APR) = (Periodic Interest Rate x 365 Days) x 100
Annual Percentage Rate (APR) = (Periodic Interest Rate x 365 Days) x 100
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