ECONOMICS (CBSE/UGC NET)

Detailed explanation-1: -Annual percentage rate (APR) refers to the yearly interest generated by a sum that’s charged to borrowers or paid to investors. APR is expressed as a percentage that represents the actual yearly cost of funds over the term of a loan or income earned on an investment.

Detailed explanation-2: -The average APR on a 24-month unsecured personal loan in the U.S. is 11.23% as of November 2022. 2 The rate you pay, depending on the lender and your credit score, can range from 6% to 36%. 3 For comparison, the average APR on a 60-month secured new car loan is 6.55%.

Detailed explanation-3: -What Is Interest Cost? Interest cost is the cumulative amount of interest a borrower pays on a debt obligation over the life of the borrowing. Interest is paid on the debt in addition to repayment of principal.

Detailed explanation-4: -The price paid for borrowing money. It is expressed as a percentage rate over a period of time. Interest rates may be fixed, meaning the rate is set and will not change, or may be variable or “floating, ” meaning the rate may move higher or lower over time.

Detailed explanation-5: -Interest rates on credit cards usually range from 2.5% to 3.5% per month. However, this may vary from issuer to issuer and also from one card to another.