What is the difference between APR and APY in cryptocurrency lending?

3 answers

• Dec 16, 2021 · 3 years ago
  APR stands for Annual Percentage Rate, while APY stands for Annual Percentage Yield. Although they may sound similar, there is a key difference between the two. APR represents the annualized interest rate without taking compounding into account, while APY takes into consideration the effect of compounding. In cryptocurrency lending, APR is often used to calculate the interest rate on loans, while APY provides a more accurate measure of the actual yield that an investor can earn. So, if you're comparing different lending options, it's important to consider both the APR and APY to get a complete picture of the potential returns.
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• Dec 16, 2021 · 3 years ago
  APR and APY are two important metrics in cryptocurrency lending. APR, or Annual Percentage Rate, is the interest rate charged on a loan or investment on an annual basis. It does not take into account the effect of compounding. On the other hand, APY, or Annual Percentage Yield, factors in the compounding effect and provides a more accurate measure of the actual yield. In cryptocurrency lending, APR is often used to advertise the interest rate, while APY gives a better understanding of the overall return. So, when comparing lending options, it's important to consider both APR and APY to make an informed decision.
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• Dec 16, 2021 · 3 years ago
  APR and APY are terms commonly used in cryptocurrency lending to describe the interest rates and yields. APR, or Annual Percentage Rate, represents the interest rate charged on a loan or investment without considering compounding. It is a simple interest rate. On the other hand, APY, or Annual Percentage Yield, takes into account the compounding effect and provides a more accurate measure of the actual yield. It is a compound interest rate. When comparing lending options, it's important to pay attention to both APR and APY to understand the true cost and potential returns of the investment.
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