Can someone knowledgeable about Liquidity pools help me understand

got a few questions, any insight appreciated.

Does anyone here know how the APR % is determined for AMM pairs?

Lets say providing liquidity to a pair AAA/BBB is 16% APR.

Does this mean if i deposit $500 of AAA and $500 of BBB, i will be making 16% a year?

Is impermanent loss just simply the difference between this 16% APR and the gains i would have made if i instead just held the coins. So if i dont care about 100% profit/loss, can i just provide liquidity to guarantee 16% annual gains? Or am i misunderstanding something.

thank you