Annual Percentage Yield

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Annual Percentage Yield (APY) expresses an annual rate of interest taking into account the effect of compounding. It is always greater than or equal to the Annual percentage rate (APR).

APY = \left(1 + \frac {i_{nom}} {N} \right)^N -1

where

inom is the Nominal interest rate and
N is the number of compounding periods per year.

This formula is implemented in this calculator.

The Annual Percentage Yield does not take transaction costs on loans or savings accounts into account, see also Annual percentage rate.

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