Cars · RATIOXA GLOSSARY
Effective APR
Annual price of credit including the mandatory costs covered by the measure. It makes equal-term offers easier to compare.
Simple definition
Annual price of credit including the mandatory costs covered by the measure. It makes equal-term offers easier to compare.
Why it matters
This term changes how inputs, cash flows or results should be interpreted. RATIOXA keeps it explicit so two options are compared on the same basis.
Worked example
A 4.5% APR does not mean 4.5% of the original amount is paid every year: interest applies to the remaining balance.