| rate of return The annual return on a loan as a percentage of its principal. Where interest is paid at intervals other than annual, the annual percentage rate (APR) is found by compounding the actual payments; for example, if 1.5 per cent a month is charged, the APR is 100 (1.01512 - 1) = 19.56 per cent per annum. A rate of return may be given before or after deduction of income tax on the interest. See also: internal rate of return and required rate of return |