APR to APY Calculator
Convert between APR (the nominal rate) and APY (the effective annual yield). Pick a direction, enter a rate and choose how often interest compounds to see the equivalent rate.
How to convert APR and APY
- Choose a direction: APR to APY or APY to APR.
- Enter the rate as a percent and pick how often it compounds.
- Read the converted rate, rounded to four decimal places.
Examples
12% APR compounded monthly
APR 12%, monthly (12 periods)
APY 12.6825%
5% APY compounded daily
APY 5%, daily (365 periods)
APR 4.8791%
Frequently asked questions
What is the difference between APR and APY?
APR is the nominal annual rate, the simple stated rate before compounding. APY is the effective annual yield, the rate you actually earn or pay once compounding within the year is included.
Why is APY higher than APR?
APY accounts for interest earned on interest during the year. Each time interest compounds it is added to the balance, so the next period earns slightly more. The more often that happens, the larger the gap.
How does compounding frequency change the result?
For a fixed APR, more frequent compounding raises the APY. Annual compounding leaves APR and APY equal, while monthly or daily compounding pushes APY higher. The effect shrinks as the frequency increases.
Which one do banks usually quote?
In the United States, deposit accounts like savings and CDs are quoted as APY so returns are comparable, while loans and credit cards are quoted as APR. Always check which figure a rate represents before comparing offers.
How is the conversion calculated?
APY equals (1 + APR/n) raised to the power n, minus 1. To go the other way, APR equals n times ((1 + APY) raised to the power 1/n, minus 1), where n is the number of compounding periods per year.
Does this account for fees?
No. The calculator converts a pure interest rate between its nominal and effective forms. Loan APRs that bundle fees, or yields net of account fees, are not modeled here.
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