Rate Apy Calculator

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APY Yield Calculator

Annually (1/year) Semi-Annually (2/year) Quarterly (4/year) Monthly (12/year) Weekly (52/year) Daily (365/year)
Effective Annual Percentage Yield 0.00%

What is APY (Annual Percentage Yield)?

Annual Percentage Yield (APY) is the real rate of return earned on an investment or paid on a savings account, taking into account the effect of compounding interest. Unlike a simple nominal interest rate, APY reflects how often interest is added to your balance. The more frequently interest compounds, the higher your APY will be relative to the stated nominal rate.

The APY Formula

The mathematical calculation for converting a nominal rate into APY is as follows:

APY = (1 + r/n)^n – 1
  • r: The nominal annual interest rate (as a decimal).
  • n: The number of compounding periods per year.

Real-World Example

Imagine you have a savings account with a 4.00% nominal annual rate. Depending on how often the bank compounds that interest, your actual yield changes:

  • Compounded Monthly: Your APY would be 4.07%.
  • Compounded Daily: Your APY would be 4.08%.

While the differences might seem small, they significantly impact long-term wealth accumulation when dealing with large balances or long time horizons.

Why APY Matters for Savers

When comparing financial products like CDs (Certificates of Deposit), Money Market accounts, or High-Yield Savings Accounts, always look at the APY rather than the nominal rate. APY provides a "standardized" number that allows you to compare two different accounts with different compounding schedules on an apples-to-apples basis.

function calculateAPY() { var nominalInput = document.getElementById('nominalRate').value; var n = parseFloat(document.getElementById('compoundingPeriods').value); if (nominalInput === "" || isNaN(nominalInput)) { alert("Please enter a valid nominal interest rate."); return; } var r = parseFloat(nominalInput) / 100; // Formula: APY = (1 + r/n)^n – 1 var apy = Math.pow((1 + (r / n)), n) – 1; var apyPercentage = apy * 100; // Display results document.getElementById('resultArea').style.display = 'block'; document.getElementById('apyOutput').innerHTML = apyPercentage.toFixed(4) + "%"; var difference = apyPercentage – (r * 100); document.getElementById('comparisonText').innerHTML = "Compounding increases your effective yield by " + difference.toFixed(4) + "% over the base nominal rate."; }

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