The true yearly return after compounding is included.
Banks advertise APY on savings (looks bigger) and APR on loans (looks smaller) — same math, opposite marketing. Always compare like with like.
Formula: APY = (1+r/n)^n − 1
Example: 4.2% compounded monthly = 4.28% APY.
FAQ
What is APY in simple terms?
Banks advertise APY on savings (looks bigger) and APR on loans (looks smaller) — same math, opposite marketing. Always compare like with like.
How is it calculated?
APY = (1+r/n)^n − 1. Example: 4.2% compounded monthly = 4.28% APY.