is apy the same as apr? for credit, loans and interest?

Answer 1

APR, or average percentage rate, is the interest rate paid on a loan or credit line.

APY, or average percentage yield, refers to the effective rate earned annually in an interest-bearing savings vehicle. It represents the effect compounding has on the interest rate. Example: $1,000 into a 12 month CD at 5% interest will result in a balance of $1051.16 at the end of one year. The APY is 5.116%.