Why the distinction matters
APR ignores compounding; APY includes it. Banks advertise savings with APY but loans with APR, so comparing products across that divide requires conversion — exactly what this tool does.
APY Calculator
Convert nominal APR to effective annual yield and back, for any compounding frequency.
Enter your details and press Calculate to see results.
Formula
APY = (1 + APR/n)^n − 1 · APR = n × ((1 + APY)^(1/n) − 1)
Example
6% APR compounded monthly = 6.168% APY; compounded daily = 6.183% APY.
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Frequently asked questions
Which is higher, APY or APR?
For the same nominal rate, APY is always ≥ APR because it captures intra-year compounding.
Does continuous compounding change much?
Beyond daily compounding the gains are negligible — daily vs continuous differs only in the fourth decimal place at typical rates.
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