Annual Percentage Rate (APR) and Effective APR
Provided by Khan Academy
Most of us have used credit to buy something. While credit cards provide convenience, one must bear in mind that they can be dangerous if not used in moderation. You have to understand how credit cards work to take full advantage of borrowing money. You can start with understanding the difference between APR and effective APR. APR is a standard way to quote interest rates when banks lend money to borrowers and earn interest. Effective APR or EAR (Effective Annual Rate) is a standard way to quote interest rate when banks pay interest to customers for depositing money with them. The following tutorial will discuss both APR and effective APR.
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