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How does APR differ from EAR?

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Question added by Sultan Alghamdi
Date Posted: 2016/01/30
Saleh Mahasneh
by Saleh Mahasneh , Vice President , Zohoor Alreef

simply the different in calculation based on compound and interest rate

where APR ( Annual percentage rate ) is the simple rate but the (EPR) effective percentage rate is the compound calculation of interest rate

 

Usman Mukhtar
by Usman Mukhtar , Tax Accountant , Waheed Group of Companies

APR refers to the nominal annual percentage of rate while EAR refers to the ‘effective’ percentage of rate or effective APR. These are descriptions of the annualized interest rate rather than the monthly rate calculated on a loan or mortgage.

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