# annual percentage rate

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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 interest intervals are more frequent than annual. Similarly those charge cards that advertise monthly rates of interest (say, 2%) must state the equivalent APR. In this case it would be [(1.02)12 – 1] = 26.8%.

Accounting dictionary. 2014.

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