Question 1

What is APY?

Accepted Answer

APY (Annual Percentage Yield) is the effective annual rate of return on an investment, accounting for compounding. It shows the actual interest rate you earn over a year, including the effect of compound interest.

Question 2

How is APY calculated?

Accepted Answer

This calculator uses monthly compounding to determine the APY. Given your initial investment, final investment, and time period, it calculates the annual interest rate that would produce that growth with monthly compounding.

Question 3

What's the difference between APY and APR?

Accepted Answer

APY (Annual Percentage Yield) includes the effect of compounding, showing the actual return you'll earn. APR (Annual Percentage Rate) is the simple interest rate without compounding. APY is typically higher than APR for the same nominal rate.

Question 4

Can I use this to analyze past investments?

Accepted Answer

Yes! This calculator is perfect for analyzing past investment performance. Enter your initial investment amount, the final value you received, and the time period to calculate the effective annual return rate (APY) you achieved.

APY Calculator

What is APY?

How is APY calculated?

What's the difference between APY and APR?

Can I use this to analyze past investments?