GlossaryBeginner
APR
Annual Percentage Rate — a simple, non-compounded yearly rate of return or cost.
Annual Percentage Rate (APR) expresses a simple, non-compounded rate over one year, without accounting for reinvested or compounded returns.
APR is commonly used to express borrowing costs as well as yields — the same concept applies to both, describing a simple annualized rate without compounding.
Examples
- A lending protocol might quote its borrowing cost as an APR rather than a compounded APY.
- The same underlying rate produces a higher APY than APR once compounding is factored in.