What term describes the interest rate for a whole year?

The term that describes the interest rate for a whole year is the Annual Percentage Rate (APR). APR is a comprehensive measure that reflects the true cost of borrowing or the true yield on an investment over a one-year period. It takes into account not just the nominal interest rate but also any additional costs or fees associated with the loan or investment, thereby giving borrowers and investors a more complete understanding of what they will owe or earn over a year.

While the other terms have specific meanings, they do not provide the same information that APR does. The annual interest rate refers specifically to the rate charged for a full year without considering any additional costs or fees that may apply. The monthly percentage rate typically presents a fraction of the annual interest rate indicating what would be charged for each month. Meanwhile, the daily interest rate breaks down the annual rate into a daily figure, which isn’t as useful for understanding the cost over a full year. Thus, among the options provided, the Annual Percentage Rate effectively encapsulates the interest and any additional costs for an entire year.