APR and Interest Rate

Annual Percentage RateInterest Rate
Definition:Annual Percentage Rate (APR) is an expression of the effective interest rate that the borrower will pay on a loan, taking into account one-time fees and standardizing the way the rate is expressed.Interest is a fee on borrowed capital. Interest rate is a "rent on money" to compensate the lender for foregoing other useful investments that could have been made with the loaned money.
Transaction costs:Transaction costs and fees are taken into account when calculating APR.Typically, interest rates do not include transaction costs.

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