APY Calculator
Turn a nominal annual rate (APR) into the effective annual yield (APY) you actually earn after compounding. Enter the APR and how often it compounds to see the APY, and use the inverse to recover an APR from a quoted APY.
How to use the APY calculator
- Enter the nominal annual rate (APR) as a percentage.
- Choose how many times per year the interest compounds.
- Read the effective annual yield (APY) for that compounding schedule.
Examples
12% APR compounded monthly
apr 12%, compounded monthly
APY 12.6825%
12% APR compounded daily
apr 12%, compounded daily
APY 12.7475%
Frequently asked questions
What is the difference between APR and APY?
APR is the nominal annual rate before compounding within the year. APY is the effective annual yield once compounding is included, so APY is always equal to or higher than APR for the same rate.
What is the APY formula?
APY = (1 + APR/n)^n - 1, where APR is the nominal rate as a decimal and n is the number of compounding periods per year. The result is expressed as a percentage.
Why does daily compounding give a higher APY than monthly?
The more often interest is added, the sooner it starts earning interest of its own. For the same APR, daily compounding beats monthly, which beats quarterly and annual, so the APY rises with frequency.
When are APR and APY the same?
When interest compounds only once per year (n = 1), there is no intra-year compounding, so the effective yield equals the nominal rate and APY equals APR.
How do I convert an APY back to an APR?
Use APR = n * ((1 + APY)^(1/n) - 1). This calculator runs that inverse for you so you can compare a quoted APY against a nominal rate at the same compounding frequency.
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