When the monthly interest rate of a credit card is multiplied by 12, this is referred to as the Annual percentage rate.
The Annual Percentage Rate (APR) is the cost you pay each year to borrow money, including fees, expressed as a percentage. It is a broader measure of cost of borrowing that is it is a broader concept of interest rate. It reflects not only the interest rate but also the fees that you have to pay to get the loan. The Formula for APR is: APR = (Fees + Interest) x 1 year x 100 / Principal amount, number of periods for loan. It is charged by a financial institution on a loan or earned by an investment. It can be of two types fixed APR and variable APR.
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