APY Calculator
About APY Calculator
The APY calculator shows the effective yearly return after compounding and estimates interest earned on a starting balance, which is useful for savings accounts and other compounded rates.
How to Use
The APY calculator shows the effective yearly return after compounding and estimates interest earned on a starting balance, which is useful for savings accounts and other compounded rates. Enter the Principal, Annual rate, and Compounding periods values and review the APY, Ending balance, and Interest earned outputs after you calculate.
- Open the calculator : Use APY Calculator from the Finance category.
- Check the inputs : Review the required values and any optional settings.
- Read the formula : Use the formula and notes below to understand how the result is produced.
Common Questions
What does the APY Calculator estimate?
Convert a nominal annual rate into annual percentage yield.
What can change the estimate?
This is an estimate, so taxes, fees, payment timing, compounding, and changing returns can move the result.
What is the difference between APY and APR?
APR (Annual Percentage Rate) is the interest you are charged when you borrow money, such as on a mortgage or credit card. APY (Annual Percentage Yield) is the interest you earn when you save or invest money, such as in a high-yield savings account, and it factors in the effects of compound interest.
Inputs
- Principal
- Annual rate
- Compounding periods
Outputs
- APY
- Ending balance
- Interest earned
Formula
APY = (1 + annual rate / compounding periods) ^ compounding periods - 1.