Annual Percentage Rate

APR is the annual rate quoted in industry, indicating simple interest earned in one year.

• Unless stated otherwise, interest rate given in questions is always APR

Suppose there are two banks offering these interests:

• Bank 1 offers 3% per quarter. This has an an APR of 3%(4) = 12%.
• Bank 2 offers 1% per month. This has an APR of 1%(12) = 12%.

We do not use APR for decisions. If give EAR, we can find APR as:

$$\text{APR}=m[(1+\text{EAR}{)}^{1/m}-1]$$