The annual percentage rate (APR) is a measure used to express the cost of borrowing or the return on an investment over a year. It includes not just the interest rate but also any additional fees or costs associated with the loan or investment. This makes it easier for consumers to compare different financial products, such as loans or credit cards, by providing a standardized rate. APR is important because it helps individuals understand the true cost of borrowing money. For example, when taking out a mortgage or using a credit card, knowing the APR can help you make informed decisions about which option is more affordable in the long run.