Final answer:
The cost of borrowing money annually that includes both interest and other loan-related fees is called Annual Percentage Rate (APR). APR provides a more accurate measure of the total cost of a loan compared to just the interest rate. Credit cards often have an APR that includes interest rates and other fees, contributing significantly to the total amount paid by the borrower.
Step-by-step explanation:
The cost of borrowing money on an annual basis that takes into account the interest rate and other related fees on a loan is known as the Annual Percentage Rate (APR). This rate includes not only the interest that will be paid on the debt over a year, but also any additional charges or fees that the borrower must pay, thus giving a more complete picture of the total cost of the loan.
Credit cards are a common way to borrow money, and a typical credit card interest rate ranges from 12% to 18% per year. However, the APR can be higher when additional fees are included. The average annual interest rate for credit card borrowing can be about 15%, which suggests that Americans could be paying tens of billions of dollars each year in interest on their credit cards. This figure is augmented by basic fees for the credit card or fees for late payments.