Annual Percentage Rate

Annual Percentage Rate is a rate an investor pays on the annual cost of funds covering their mortgage, loan, or credit card that considers interest, insurance, and principal payment amounts. This is what banks use as the fee of borrowing credit. The monthly percentage of APR can be determined by dividing the APR by twelve, for how many months in a year. The APR is used in most mortgages or credit agreements and can be any of the fees and costs that make up an interest rate in addition to the the mortgage, loan, or investment. APR is all the costs and fees that will need to be paid back, this number is used to help compare between mortgages, loans, and investments as well.