What Is Annual Percentage Rate (APR)?

APR stands for Annual Percentage Rate in quantitative finance. It is a standardized way of expressing the cost of borrowing money or the return on investment over a yearly basis. In quantitative finance, APR is commonly used in various financial instruments such as loans, mortgages, credit cards, and investment products.

In trading Compound Annual Growth Rate (CAGR) is more commonly used. APR is used for loans, delta neutral trading strategies and yield farming in decentralised finance.

APR does not account compounding interest, unlike Annual Percentage Yield (APY).

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