effective annual percentage rate (EAPR)
[ɪˈfɛktɪv ˈænjuəl pərˈsɛntɪdʒ reɪt]
nounpl: effective annual percentage rates
taxa anual efetiva de juros (TAEJ)
1. The actual annual cost of a loan or credit expressed as a percentage, including all fees, interest, and compounding effects
The effective annual percentage rate on this credit card is 22.5%, which is higher than the nominal rate due to monthly compounding.
A taxa anual efetiva de juros do cartão de crédito é de 22,5%, que é superior à taxa nominal devido ao efeito de composição mensal.
2. A standardized measure used to compare the true cost of different loans or investment returns by accounting for the frequency of compounding
When comparing mortgages, always check the effective annual percentage rate rather than just the nominal rate.
Ao comparar hipotecas, sempre verifique a taxa anual efetiva de juros em vez de apenas a taxa nominal.
In Brazil, the EAPR is a regulated financial metric that lenders must disclose to consumers, particularly for credit cards and personal loans. Financial institutions are required by law (Lei de Proteção ao Consumidor) to clearly present this rate alongside the nominal rate. In the USA, it is a core component of truth-in-lending regulations (Regulation Z) and is essential for consumer protection in credit markets.
Related Idioms & Phrases
the bottom line on interest rates
the real cost of borrowing
comparing apples to apples in lending
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