Annual percentage rate (APR) vs effective annual rate (EAR) / Principles of finance / Episode 4

We explain what the Effective Annual Rate (EAR) means and how it differs from the Annual Percentage Rate (APR) with practical examples. We consider different compounding frequencies (semi-annual, monthly, continuous) as well.

00:00 The difference between the APR and EAR
03:20 EAR formula
04:38 Monthly compounding
07:41 Continuous compounding
10:19 Outro

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