Annual Percentage Rate (APR)
The Annual Percentage Rate (APR) is the annual interest paid to investors at certain rates. It is used to calculate staking rewards on cryptocurrency exchanges and wallets.
Annual Percentage Rate (APR) refers to the interest you have to pay or earn annually in the finance world. It includes all the fees and additional costs that will be experienced during this process. In short, it is used to mean simple interest.
Financial institutions and platforms must specify the Annual Percentage Rate (APR) before any deal or investment. At the same time, the fact that the Annual Percentage Rate is high creates an extremely disadvantageous situation for users who are on the debit side. For those who are on the investment side, a high rate is considered a great advantage.
Highlights of the Annual Percentage Rate (APR)
- APR and APY (annual percentage yield) are different concepts. The latter provides profit through the simple interest rate and compound interest. As a result, the return becomes the annual principal’s interest with added interest on your earnings. Go to the APY article for more.
- Annual Percentage Rate (APR) is very important data because it provides the yearly cost of your borrowing, that is, the actual annual cost of funds over the term of a loan on an investment. Simply, it is the annual interest you will earn.
- Platforms and financial institutions must disclose the Annual Percentage Rate (APR) before transactions and agreements.
How is the Annual Percentage Rate (APR) Calculated, What is the Formula?
The Annual Percentage Rate (APR) is calculated by multiplying the periodic interest rate the dApp or the bank offer by the number of periods in a year in which it was applied.
