Annual Percentage Rate (APR) and Annual Percentage Yield (APY) are standardized ways of describing the amount of money that you might pay on a loan or earn on an investment, but what do they really mean, and what is the difference between the two phrases? Even more importantly, how can you use these numbers to determine what is the best opportunity for you?

The APR is the amount that an investment (or loan) grows in a given period, multiplied by the number of those periods in a year....