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How to Calculate APY.
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How to Calculate APY.

Rosemary Njeri

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.

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.

Therefore, the annual percentage yield.

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