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What is the difference between the annual percentage rate (APR) and the effective annual rate (EAR)?...

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Finance

What is the difference between the annual percentage rate(APR) and the effective annual rate (EAR)? Which rate do youbelieve is more relevant for financial decisions and why?

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Annual Percentage Rate also called nominal rate does not include the affects of compounding It infact represents simple interest rate This rate is quoted by banks for deposits Auto loans and mortgage loans are represented    See Answer
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What is the difference between the annual percentage rate(APR) and the effective annual rate (EAR)? Which rate do youbelieve is more relevant for financial decisions and why?

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