{[ promptMessage ]}

Bookmark it

{[ promptMessage ]}

APR vs APY 01 - What is the difference between APR and APY...

Info iconThis preview shows pages 1–2. Sign up to view the full content.

View Full Document Right Arrow Icon
What is the difference between APR and APY? : Student Credit Informa... http://www.studentplatinum.com/credit_card_education/aprversusapy.php 1 of 2 2/28/2007 12:01 AM What is the difference between APR and APY? For loans or investments that involve compounding interest, there are two popular interest rate related terms. Annual Percentage Rate, or APR, is a measure of how much interest will be on an annual basis without taking into account compound interest. Annual Percentage Yield, or APY, is the same measure of interest rate, but accounting for compound interest - a better measure of how much you will pay in interest. Banks and credit card issuers often express credit card interest rates in APR, in order to better hide just how much interest would cost. Fortunately, calculating APY is relatively simply matter, as is APR. Here are some examples so that you can calculate APR versus APY: APR = Period Rate x Periods per Year Let's say a credit card company offers a 13% interest rate, and they express that rate in terms of APR with a monthly billing cycle.
Background image of page 1

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full Document Right Arrow Icon
Image of page 2
This is the end of the preview. Sign up to access the rest of the document.

{[ snackBarMessage ]}