ECONOMICS (CBSE/UGC NET)

Detailed explanation-1: -You may have seen the term annual percentage rate (APR) while shopping for a credit card, mortgage, car loan or personal loan. An APR is a number that represents the total yearly cost of borrowing money, expressed as a percentage of the principal loan amount.

Detailed explanation-2: -Annual percentage rate (APR) refers to the yearly interest rate you’ll pay if you carry a balance on your credit card. Some credit cards have variable APRs, meaning your rate can go up or down over time.

Detailed explanation-3: -APR is the annual cost of a loan to a borrower-including fees. Like an interest rate, the APR is expressed as a percentage. Unlike an interest rate, however, it includes other charges or fees such as mortgage insurance, most closing costs, discount points and loan origination fees.

Detailed explanation-4: -Your credit card APR is the amount of interest you’ll be required to pay if you don’t pay off your balance in full each month. This percentage typically ranges from around 12% to 26% depending on a variety of factors, including your credit score and the type of credit card you have.

Detailed explanation-5: -A 24% APR on a credit card is another way of saying that the interest you’re charged over 12 months is equal to roughly 24% of your balance. For example, if the APR is 24% and you carry a $1, 000 balance for a year, you would owe around $236.71 in interest by the end of that year.