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Answered 2007-07-20 03:48:59
The actual interest rate on a mortgage will always be higher than the annual percentage rate unless the borrower keeps the loan for the full term. Refinancing or selling before the end of the term results in a much higher actual (effective) interest rate. The effective rate on a mortgage can be lower than the annual percentage rate (fixed rate) by paying extra to principal especially early in the mortgage term.
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Related Questions
A higher interest rate is usually the trade-off for what?
Annual Percentage Rate
What is the true annual rate of interest charged?
The true annual rate of charged interest is called the annual percentage yield. It is the interest charged and compounded against.
What is annual interest?
Annual interest is interest that accumulates every year. This is a predetermined percentage that is added to a loan or credit card payment.
What describes a annual percentage rate?
A measure of the cost of credit expressed as a yearly interest rate.
How is simple interested calculated differently from coupounded interest?
With compound interest the interest amount is added to the principle and then earns interest as well. This is usually expressed as an annual percentage rate (APR). Simple interest is not added to the principle and does not earn further interest and is used rarely.
What a loan is What interest is And how the annual percentage rate measures the true cost of a loan?
What a loan is: A sum of money lent at interest.What interest is: A charge for a loan, usually a percentage of the amount loaned.And how the annual percentage rate measures the true cost of a loan? Annual percentage rate, commonly referred to as APR, is what creditors charge consumers in order to allow them to make installment payments on rather large purchases, such as What_does_the_term_annual_percentage_rate_mean_for_a_loanand homes. Loan types, credit score, report, and history, can all have effects on what APR you can get for a loan.
What does the acronym APY mean?
Annual Percentage Yield. It means expresses an annual rate of interest taking into account the effect of compounding . It is always greater than or equal to the Annual Percentage Rate [APR]
When pertaining to financial loan what does APR stand for?
Annual Percentage Rate (of the interest rate)
How much interest daily 1 million dollar?
The answer will depend on the interest rate. Multiply the annual interest rate (in percentage terms), by 10000/365
What does the term annual percentage rate mean for a certificate of deposit account?
Annual percentage yield (APY) is a normalized representation of an interest rate, based on a compounding period of one year
What is apr mean?
Annual Percentage Rate. Refers to the Interest rate paid on a car loan.
A way to find interest that uses a 365 day year is?
Apr =annual percentage rate
What is the annual percentage rate APR on a credit card?
The amount of interest charged on unpaid balances
What is the current interest rate of Tesco Credit Cards?
The Tesco clubcard credit card has a 16.9% annual percentage rate. There is also an introductory 0% interest rate for 15 months upon signing up for the card. The actual rate you get can be dependent on your credit rating.
What is prime APR?
APR stands for Annual Percentage Rate or percentage of interest a company charges you on a 12 month basis for a balance on their card.
Is the annual interest rate the same as simple interest?
Usually no. Most institutions charge (and pay) compound interest, NOT simple interest.Usually no. Most institutions charge (and pay) compound interest, NOT simple interest.Usually no. Most institutions charge (and pay) compound interest, NOT simple interest.Usually no. Most institutions charge (and pay) compound interest, NOT simple interest.
What is the average Annual Percentage Rate on home improvement loans?
The average annual percentage rate or interest rate on home improvement loans is around 3.99% to 9.49%. Honestly it really depends on your credit profile.
How do you find unknown yearly rate of interest?
-- Divide end-of-year amount by beginning-of-year amount. -- Subtract ' 1 ' from the result. -- Multiply the result by 100. -- Result is the annual percentage yield. (Not the same as annual percentage rate, if interest is compounded more often than annually.)
What does annual percentage mean?
"Percentage" means parts per hundred: it is a ratio where the denominator is implicitly 100. So, for example, 27% = 27/100.Annual percentage usually refers to a percentage changeover a period of one year.
What is effective interest rate?
An effective interest rate is an actual amount of interest that is paid on a loan or investment vehicle. It differs from the Annual Percentage Rate.It takes into account the concept of compound interest.It is commonly used to calculate the total amount that will accumulate or will need to be repaid on bank accounts or when repaying revolving credit card accounts.
How do you convert annual interest rate to monthly?
Let i = annual rate of interest. Then i' = ((1+i )^(1/12))-1 Where i' = monthly rate of interest
What would be the monthly interest on 500000?
The monthly interest on $500,000 will depend on the interest rate at the time the money was borrowed. Interest is usually charged as an annual rate and then broken down into monthly segments.
Why is the APR considered the most important factor to be mindful in a car loan?
The APR or annual percentage rate is important, because it the percentage of interest that will be paid yearly. The interest adds more money on top of the car payment.
What does APR stand for?
Usually it stands for Annual Percentage Rate (used to calculate the amount of interest charged on the balance of a credit card or loan). If that doen't make sense in relation to where you saw it then it may stand for something else. Also: The nominal rate of interest is the rate used when calculating the interest expense on your loan. That's what most people consider to be the interest rate on their loan. The annual percentage rate (APR) on a loan includes some of the costs involved in procuring the loan and is meant to provide the consumer with an effective rate to use when comparing loans.
What is the amount of interest that a 100 deposit would earn after compounding for one year called?
Annual equivalent percentage rate.
