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Question

What is the difference between the annual percentage rate (APR) and the effective annual rate (EAR)? Which rate do you believe is more relevant for financial decisions and why?

Top Reviews
EYS***758 2019-09-23 05:40:20
Info was reallyhelpful.

Solution Preview

APR talks about the nominal yearly % of rate while EAR talks about the net effective % of rate or effective APR. These are portrayals of the annualized financing cost instead of the month to month rate figured on a credit or contract. APR is the basic financing cost every year while EAR 

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