Finance Formulas / July 18, 2018 / Alia Marquez
Annual percentage rate (APR) is the annualized interest rate on a loan or investment which doesn’t account for the effect of compounding. It is the annualized form of the periodic rate which when applied to a loan or investment balance gives the interest expense or income for the period. In most cases it is the interest rate quoted by banks and other financial intermediaries on various products i.e. loans, mortgages, credit cards, deposits, etc. It is also called the nominal annual interest rate or simple interest rate.
Accounts receivable, bills to customers that have yet to be paid, are considered current assets as long as they can be expected to be paid within a year. If a business has been making sales by offering loose credit terms, a chunk of its accounts receivables might not come due for a longer period of time. It is also possible that some accounts will never be paid in full.
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