Annual Percentage Rate (APR)
finance · trading
The yearly interest rate without accounting for compound interest.
Annual Percentage Rate (APR) represents the yearly interest charged or earned without considering compounding within the year. It's commonly used in lending and some staking products.
- APR focuses on the nominal rate
- APY includes compounding effects
For a nominal rate r with n compounding periods per year, the relationship is: APY = (1 + r / n)^n - 1 Given APY, the equivalent nominal APR with n periods is: APR = n × ((1 + APY)^(1/n) - 1)
Marketing materials may mix APR and APY. Verify which metric is quoted and the compounding frequency to compare offers fairly.
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Annual Percentage Yield
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