rahman2008
Nov 12, 2008, 05:47 PM
Would you please share with me the interest rate calculations for the apr and the ear. Why do they differ? Aren't interest rates just interest rates?
codyman144
Nov 12, 2008, 10:53 PM
Effective interest rate - Wikipedia, the free encyclopedia (http://en.wikipedia.org/wiki/Effective_interest_rate)
Annual percentage rate - Wikipedia, the free encyclopedia (http://en.wikipedia.org/wiki/Annual_percentage_rate)
They are quite different but simply put I think the EAR factors in the number of compunding periods where APR does not. There are more differences then this but that is a start.