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Calculation Machine

APY Calculator

Effective yearly yield with compounding.

Reviewed by James Whitfield · How we check our maths

Your values

ⓘ Live results

Results
APY
4.594%
Interest in year 1
$459.40
Balance after 1 year
$10,459.40
Balance after 5 years
$12,517.96

Working

  1. 1APY = (1 + 0.045/12)^12 − 1 = 4.594%

Quick answer

APY is the effective annual return after compounding, so it is always equal to or higher than the stated nominal rate.

The formula

APY = (1 + r/n)^n − 1

Worked example

Worked example

Using the values the calculator loads with.

Inputs

  • Nominal rate4.5 %
  • CompoundingMonthly
  • Starting balance10000 $

Result

  • APY4.594%
  • Interest in year 1$459.40
  • Balance after 1 year$10,459.40
  • Balance after 5 years$12,517.96

How to use the APY Calculator

  1. 1Enter the advertised nominal rate.
  2. 2Pick the compounding frequency.
  3. 3Add a balance to see the dollar difference.

Frequently asked questions

Is APY the same as APR?

No. APR describes borrowing cost, APY describes earning yield with compounding.

Does daily compounding matter much?

At normal rates the gap between daily and monthly is only a few hundredths of a percent.

About this calculator