LeoGlossary: Annual Percentage Return (APR)

The cost to borrow money. It is the yearly generated by the interest charged on the amount loaned.

APR is absent any compounding effects.

The formula is simply to divide the sum total of the interest by the amount of the loan or investment.

APR applies to:

• credit cards
• mortgages
• car loans
• student loans

The rate is applied on a yearly basis which can then be divided into quarterly or monthly segments. It is charged to borrowers and paid to investors.

Related:

• The Difference Between APR and APY

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