The APR (Annual Percentage Rate) is a simple nominal interest rate representing annual interest accrued.  APR is the base rate that allows linear compounding period after period.

Periodic Rate = APR / n

When n = Frequency of compounding within a year.

APR is used in the context of costs: i.e. Inflation rate, interest rate on debt.

If the frequency of compounding is annual, then APR will be the same as the APY.


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