APR to APY Calculator
Convert between Annual Percentage Rate (APR) and Annual Percentage Yield (APY) for different compounding frequencies.
Rate Details
%
Conversion Results
APR (Nominal Rate)
5.00%
APY (Effective Yield)
5.12%
Difference
0.12%
With monthly compounding, an APR of 5.00% translates to an APY of 5.12%.
This means the effective annual return is 0.12% higher than the nominal rate due to compounding.
Frequently Asked Questions
What is the difference between APR and APY?
APR (Annual Percentage Rate) does not account for compounding, while APY (Annual Percentage Yield) does. APY is always equal to or higher than APR for the same nominal rate.
Which rate should I look at?
When borrowing, look at APR for the true cost. When saving or investing, look at APY for the true return. Always compare the same type of rate.