APR (Annual Percentage Rate) – otherwise known as (APR), is the annual rate charged for borrowing or earned through investment. This is expressed as a percentage that represents the actual yearly cost of funds over the term of a loan. This includes any fees or additional costs associated with the transaction but does include compound interest over the duration of the loan. Loans or credit agreements can vary when it comes to the structure of their interest rates, transaction fees, late penalties and other variables. A standardized computation such as the APR provides borrowers with a bottom-line number they can easily compare to rates charged by other lenders.