apr explained for dummies

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Annual Percentage Rate – APR: An annual percentage rate (APR) is the annual rate charged for borrowing or earned through an investment, and is expressed as a percentage that represents the actual.

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Interest rates are expressed as an annual percentage of the total amount borrowed, also known as the principle [source: Investorwords.com]. For example, if you borrow $100 at an annual interest rate of five percent, at the end of the year you’ll owe $105. Interest rates aren’t just random punishments for borrowing money.

What is APR? Explain it easily please! Interest is charged as an APR, or annual percentage rate. For example, your card might have an APR on purchases of 20%. The average credit card apr is around 17%. Regardless of your card’s APR, it’s a good idea to avoid interest whenever possible.

The APR is meant to indicate the amount you will pay each year over the full term of the debt. Yet when rates change this can make it more rather than less complicated. Mortgages are the best example. The APR is calculated by taking the total interest cost over the 25-year term of the mortgage, plus fees.

Presented as a percentage, APR is a calculation of the full amount you will pay for a loan over the course of one year. The calculation includes any fees you may need to pay, plus the interest rate a lender applies to your particular loan. Many loans last longer than one year.

APR Explained. APR refers to the Annual Percentage Rate and is the universal measure for comparing the price all financial products such as loans, credit cards and mortgages. For individuals looking to compare different loans and credit products, they can simply look at the APR to get an idea of how much it will cost and make an informed decision.

Welcome to my MissBeHelpful channel! Lots of you have been asking me to talk more about APR, or annual percentage rate. This is a term used in reference to everything from mortgages and car loans.

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