APY, or annual percentage yield, is how much money a bank account earns in a year, including compound interest. Learn more about what APY means for your accounts.

How to calculate APY Here’s the basic formula you can use to calculate APY: APY = (1+r/n)n – 1 Notes: “R” is the interest rate, while “N” is the number of compounding periods.

You may notice if you’re shopping for a savings account that banks advertise both an interest rate and an annual percentage rate, or APY.

APY, or annual percentage yield, is an essential factor when choosing a savings account, as it considers compound interest and helps maximize your savings over time.

What is APY, and why does it matter? Learn about the annual percentage yield, how it works, and what it means for your finances.

Let’s do the math: What’s the formula to calculate APY? Another way of defining APY is that it represents the real rate of return you can earn in one year if interest is compounded.

How to Calculate Annual Percentage Yield As mentioned above, the formula for APY is generally the same as the formula for EAR. To calculate APY, follow this equation: APY = (1+r/n)n-1 r = the period ...