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APR (annual percentage rate) and APY (annual percentage yield) differ because APY accounts for compounding. APY is always higher and shows the true return on savings or cost of credit.
Fórmula
APY = (1 + APR/n)ⁿ - 1, where n is compounding frequency per year
Guía paso a paso
- 1Enter APR as a decimal
- 2Select compounding frequency (daily, monthly, quarterly, annual)
- 3Calculate APY using the formula
Ejemplos resueltos
Entrada
APR = 5%, daily compounding
Resultado
APY ≈ 5.127%
(1 + 0.05/365)³⁶⁵ - 1
Errores comunes a evitar
- ✕Treating APR and APY as equivalent
- ✕Wrong compounding frequency
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