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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.
सूत्र
APY = (1 + APR/n)ⁿ - 1, where n is compounding frequency per year
चरण-दर-चरण मार्गदर्शिका
- 1Enter APR as a decimal
- 2Select compounding frequency (daily, monthly, quarterly, annual)
- 3Calculate APY using the formula
हल किए गए उदाहरण
इनपुट
APR = 5%, daily compounding
परिणाम
APY ≈ 5.127%
(1 + 0.05/365)³⁶⁵ - 1
सामान्य गलतियां जिनसे बचना है
- ✕Treating APR and APY as equivalent
- ✕Wrong compounding frequency
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