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December 10, 2018

Annual Percentage Rate (APR)


Word of the day

Annual Percentage Rate (APR)

An expression of the relationship of the total finance charge to the total amount to be financed as required under the federal Truth in Lending Act. Tables available from any Federal Reserve banks may be used to compute the rate, which must be calculated to the nearest one-eighth of 1 percent. Use of the APR permits a standard expression of credit costs, which facilitates easy comparison of lenders. (The act permits use of the abbreviation APR.)

 

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