What does the acronym "APR" represent in finance?

The acronym "APR" represents "Annual Percentage Rate," which is a crucial term in finance. APR is used to express the total cost of borrowing or the total return on an investment over the course of a year, expressed as a percentage. It includes not only the interest rate but also any other fees or costs associated with the loan or investment, providing borrowers and investors with a more comprehensive picture of what they will actually pay or earn over time.

Understanding APR is essential for comparing loan offers or investment products because it allows consumers to assess the true cost of borrowing or the effective yield from an investment on an annual basis. This standardized measure helps individuals make informed financial decisions, ensuring that they are fully aware of the expenses or earnings associated with their financial choices.