Interest Rate | Definition, Calculation, & Factors That Affect It
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Interest Rate | Definition, Calculation, & Factors That Affect It
While APR is a more accurate estimation of the total cost of a loan than the nominal interest rate, it is limited because it only considers a simple interest rate. If the interest compounds on a smaller time frame than annually (such as monthly or semi-annually), the actual interest paid will be higher than the APR advertised. Factoring in ...
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