Question

Which statements best describe the difference between a periodic interest rate and an apr?

Answer 1

Interest is the use of someone else's capital, which is what banks charge for providing a person with an amount of money that they do not have at that time.

Step-by-step explanation:

The annual interest rate is a percentage charged by the bank to the debtor on the debt it holds. It is what the debtor has to pay together with the capital for one year (12 months).

The periodic interest rate corresponds to the % that is charged per day, month, etc. of a debt, generally it is the annual interest rate divided in 365 days, some financial institutions divide it in 360. This ends up paying more because each day the interest is integrated as part of the capital.

Have a nice day!

Answer 2

APR is the compound rate that is used to make a standard comparison of the level of interest to be paid in loans or credit card balances in a year period.A periodic interest rate is the interest that is applied to an account at the end of a time frame and is calculated by dividing the APR by 360 or 365, depending on the issuer of the loan.