APY is short for annual percentage yield.

The annual percentage yield is the real rate of return earned on a savings deposit or investment taking into account the effect of compounding interest.

**Formula to calculate APY.**

i is the stated annual interest rate.

n is the number of compounding periods per year.

**Example:**

Suppose the annual interest rate is 5% and it is compounded semi-annually. Calculate the annual percentage yield.

Therefore, the annual percentage yield.