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APR spreads origination fees, points, and other financing charges across the loan term, expressing the true cost as an annual rate. Formula: solve for the rate r in PV = Σ PMT/(1+r)^t over all payment periods. A lower APR means lower total cost even if the nominal rate looks similar. Balloon payments and prepayment penalties can distort APR comparisons.
Converts a nominal annual rate quoted with a compound frequency into a true effective annual rate (APY).
Effective annual rate (APY)
5.1162%