ABSTRACT
What Is This Tool? The annual percentage rate (APR), also known as the effective annual yield, is the true (effective) rate of interest earned on savings that reflects the frequency of compounding.
How Is It Computed? APR is computed as follows:
APR (1 r/m)m 1.0
where
r equals the stated, nominal, or quoted rate. m equals the number of compounding periods per year.
