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Hello sir Moffat,
In BPP studytext, they sayAPR (Annual Percentage Rate) =
EAR (Effective Annual Rate)and I thought APR = Nominal Rate.
May you clarify this sir.Also, how are the above rates related to Compound Annual Rate (CAR)?
Thank you
APR/EAR are annual rates.
The nominal rate is the rate quoted, which may be quoted as an annual rate but might instead be quoted as (for example) a monthly rate. So it might be given as a nominal rate of 2% per month and you could be asked for the effective annual rate (as I explain in my lectures).
The term ‘compound annual rate’ is not used in the UK or in the exam, but would mean the same as the APR/EAR
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