Investing term

What is APR?

Annual Percentage Rate. The yearly interest cost of a loan, including most fees.

APR (Annual Percentage Rate) is the yearly cost of borrowing, expressed as a percentage and including most mandatory fees, so you can compare loans on a like-for-like basis. The higher the APR, the more expensive the debt — which is why paying down a high-APR balance is often a better "return" than any investment can reliably offer.

For example

A credit card at 22% APR costs you 22 cents a year per dollar owed — beating that with investing is nearly impossible, so clearing it first is the smarter move.

APR is taught hands-on in Stage 1 — Money, Goals & Your Financial Foundation.

See the lesson →

Related terms

CompoundingWhen your returns earn returns of their own, so money grows faster the longer it's invested.Emergency fundCash reserved for unexpected expenses, usually 3–6 months of your usual spending.Employer matchFree money from an employer that matches part of what you contribute to a workplace retirement plan.High-yield savings accountA bank account that pays meaningfully more interest than a standard checking account.
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