APR and EAR Differences and Calculation (Intermediate Accounting I #7)

APR (Annual Percentage Rate) is a reflection of the percent owed in simple interest at the end of the year. When compounding is involved, the APR can understate the true effective APR (this term is synonymous with EAR) rate or the EAR (Effective Annual Rate). We'll go about calculating both rates in this tutorial. By the end I'll summarize it all and show the effect of compounding on APR rates (dramatically affects the rates). Website: http://www.notepirate.com Follow us on Facebook: https://www.facebook.com/pages/Note-P... Follow us on Twitter:   / notepirate   We appreciate all of the support you guys have given us. Be apart of the mission to help us reach more students by subscribing, thumbs upping and adding the videos to your favorites! * Notepirate is privately owned and exclusive to Notepirate.com.*