Cryptocurrency Q&A
What does APY mean in trading?
What does APY mean in trading?
Carlo
Mon Nov 18 2024
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5 answers
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APY, or Annual Percentage Yield, is a measure of the real rate of return on an investment or a savings account over a year, taking into account the effect of compounding interest. In trading, APY is often used to evaluate the profitability of certain investments or trading strategies, helping investors understand the potential returns they can expect over a 12-month period.
5 answers
GinsengBoost
Wed Nov 20 2024
APY stands for Annual Percent Yield, which represents the compounded interest rate on an investment.
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Claudio
Wed Nov 20 2024
This metric is crucial as it reflects the actual interest rate earned on an investment, taking into account the interest generated on previously accumulated interest.
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RubyGlider
Wed Nov 20 2024
Compound interest allows the initial investment to grow exponentially over time, as each period's interest is added to the principal balance.
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SamuraiWarriorSoul
Tue Nov 19 2024
To illustrate, let's consider an investment of $100 with a 5% interest rate compounded quarterly.
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Davide
Tue Nov 19 2024
In this scenario, the interest earned in each quarter is added to the principal, leading to a higher balance for the next interest calculation.
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