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.
![How to Calculate APY.](https://www.learntocalculate.com/wp-content/uploads/2020/09/APY.png)
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.
![How to Calculate APY.](https://www.learntocalculate.com/wp-content/uploads/2020/09/APY-2.png)
Therefore, the annual percentage yield.