APY Calculator (Annual Percentage Yield)
Enter the nominal annual interest rate and how often it compounds to calculate the effective annual percentage yield (APY).
APY Calculator (Annual Percentage Yield)
Calculate the Annual Percentage Yield (APY) — the real effective annual return once compounding is taken into account.
This calculator provides an estimate for general informational purposes only. It is not a substitute for professional financial, mechanical or engineering advice.
APY captures the real return an account earns once compounding is factored in, converting a stated nominal annual rate and compounding frequency into the true effective annual yield.
Example
- With the default values shown above, this calculator returns: Annual Percentage Yield (APY) ≈ 5.12.
Frequently Asked Questions
What is the formula?
APY = ((1 + Nominal Rate ÷ Compounding Periods)^Compounding Periods − 1) × 100.
Why is APY higher than the nominal rate?
Because interest is earned on previously earned interest within the year, the effective yield ends up higher than the simple nominal rate — the more frequently it compounds, the bigger that difference.