What does APR stand for?

APR stands for Annual Percentage Rate, which is a critical concept in personal finance. It represents the yearly interest rate charged on borrowed money or earned through an investment, expressed as a percentage. The significance of APR lies in its ability to provide a standardized way to compare different financial products, such as loans and credit cards. This rate includes not just the nominal interest rate but also any associated fees, making it a more comprehensive measure of the true cost of borrowing. Understanding APR is crucial for individuals as it allows them to make informed decisions regarding loans, mortgages, and other forms of debt, helping them to budget and plan their finances effectively.