What is the difference between APR and a monthly interest rate?

662 views

[ad_1]

What is the difference between APR and a monthly interest rate?

In: Economics
[ad_2]

APR = Annual Percentage Rate. It’s the interest rate for 1 year.
Monthly interest rate, is the interest rate for 1 month.

1/12 of APR may be assigned each month. This will add to the amount due and known as compounding interest. APR does not take this into account when using as an estimation of cost on a loan.