Finance & Money · 年化利率（APR） · Updated 2026-10-25
What Is Annual Percentage Rate (APR)?
Definition
APR is the annualized all-in cost of borrowing, folding fees into one comparable number. “0.05% daily” sounds tiny but is ~18.25% APR. Compounding frequency matters: 1% monthly compounds to 12.68% effective annual rate.
Formula
Effective APR = (1 + periodic rate)^periods per year − 1
Worked Example
A “0.5% monthly fee” loan charging 6,000 on 100k over 12 months has a true APR near 11.5%, almost double the quoted 6%.
Common Misconception
"Monthly fee x 12 = annual rate" - only roughly true for one-off-fee loans; in installment scenarios the real APR approaches 2x the fee rate. Compare loans by the converted annual rate (APR/IRR), never by the fee.
Matching Calculators
Related Terms
Keep Exploring
Browse the full glossary, or head back to the homepage for 1,435 free online calculators.
Back to glossary