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Investments glossary

Annual Percentage Rate (APR)

The term annual percentage rate (APR) refers to the annual rate of interest charged to borrowers and 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 APR provides consumers with a bottom-line number they can easily compare to rates from other lenders.

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