Convert between APR and APY for any compounding frequency to compare the true cost or yield of a rate.
Estimates only — not financial advice. Verify with your lender/advisor.
An APR to APY calculator converts a nominal annual rate into the effective annual rate it produces under a given compounding frequency, so you can compare loans and savings accounts on an equal basis.
APR is the simple annual interest rate without compounding, while APY is the effective annual rate that includes the effect of compounding within the year. Because APY accounts for interest earned on interest, it is always equal to or higher than the APR. Results are estimates, not financial advice.
Use the formula APY = (1 + APR / n) ^ n - 1, where n is the number of compounding periods per year. For example, a 12 percent APR compounded monthly (n = 12) gives an APY of about 12.68 percent.
Use the formula APR = n x ((1 + APY) ^ (1 / n) - 1), where n is the number of compounding periods per year. This reverses the compounding to recover the nominal annual rate.