How to calculate APY?

If you wonder how to calculate the APY by yourself or using an Excel spreadsheet, all you need is the annual percentage yield formula: where r is the simple annual interest rate in decimal, n is the number of compounding periods per year.

What is annual percentage yield (APY)?

Annual percentage yield (APY) is a measurement that can be used to check which deposit account is the most profitable or whether an investment will yield a good return. You can also use it in reverse; you can find the interest rate with a given compound frequency if you know what the annual percentage yield is.

What is a compound monthly APY rate?

The compound monthly setting allows the calculator to factor in a varying interest rate during each month. Each month is assumed to be 12% higher than the previous month. Note that this calculation does not factor in any fees the bank might have charged on opening or maintaining the account. What is a Good APY Rate?