Answer: Annual percentage rate (APR) refers to the yearly interest generated by a sum that's charged to borrowers or paid to investors.
Explanation: 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 compare among lenders, credit cards, or investment products.