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APR vs APY: Key Distinctions

Learn about the major distinctions between APR and APY<br>https://www.herofincorp.com/blog/apy-vs-apr<br>

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APR vs APY: Key Distinctions

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  1. APR vs APY: Key Distinctions

  2. What does APY mean? • The acronym APY refers to annual percentage yield. • It is the cumulative interest you earn on your deposits. 

  3. Understanding how APY works You can calculate APY by applying the formula below. APY= (1 + R/N) ^N– 1

  4. Does APY fluctuate? Occasionally, if it is linked to the base rate.

  5. What does APR mean? • APR means annual percentage rate. • It reflects the total cost of borrowing from any lender.

  6. Understanding how APR works • You can determine APR by applying the formula below. • APR = {((Charges + Interest) ÷ Actual Borrowing Amount) ÷ n) × 365}

  7. What makes up APR? • APR includes rescheduling, processing, and foreclosure fees.

  8. The APR applies to the loan product and informs you of the actual borrowing cost. Whereas; APY reflects the cumulative interest income on bank deposits.

  9. Thanks! • Would Love to hear from you. • Hero Fincorp Limited • 09, Basant Lok, Vasant Vihar, New Delhi - 110057 • Tel : 18001024145 • Email : customer.care@herofincorp.com • Website :https://www.herofincorp.com/ Know More : https://www.herofincorp.com/blog/invest-25-lakhs-for-monthly-income

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