APR to APY Conversion Calculator
Use our free online APR to APY Calculator to perform fast, accurate calculations with instant formulas, step-by-step arithmetic, and verified reference benchmarks.
APR to APY Calculator
Instant Live Computation • Zero Waiting
Adjust inputs on the left for instantaneous live computation.
How to Calculate: The APR to APY Calculator Formula
Calculates effective annual yield (APY) where APR is nominal decimal rate and n is compound periods per year (e.g. 12 for monthly, 365 for daily).
Step-by-Step Calculation Guide
- Input nominal Annual Percentage Rate (APR).
- Select compounding frequency (Daily, Monthly, Quarterly, Semi-Annually).
- Review effective Annual Percentage Yield (APY).
- Compare interest earned over 1 year.
Practical APR to APY Calculator Examples
Credit card nominal APR of 24.0% compounded daily (n = 365).
Bank pays 4.75% APR compounded monthly (n = 12).
APR vs APY Across Different Compounding Frequencies
Official reference values and benchmark classifications based on standard institutional guidelines.
| Nominal APR | Monthly Compounding APY | Daily Compounding APY | Difference |
|---|---|---|---|
| 4.00% | 4.07% | 4.08% | +0.08% |
| 7.00% | 7.23% | 7.25% | +0.25% |
| 12.00% | 12.68% | 12.75% | +0.75% |
| 18.00% | 19.56% | 19.72% | +1.72% |
| 25.00% | 28.07% | 28.39% | +3.39% |
Frequently Asked Questions about APR to APY Calculator
What is the core difference between APR and APY?
APR does not account for intra-year compounding. APY reflects the true effective annual rate after compound interest is earned or charged.
Why do lenders advertise APR while banks advertise APY?
Banks advertise APY on savings because compounding makes the yield look larger. Lenders advertise APR on debt because it makes the interest rate look smaller.
How does daily compounding compare to monthly?
Daily compounding generates slightly more interest than monthly, though the difference is modest at low interest rates and expands significantly on high APRs.
Can APY be lower than APR?
No. Because compounding always adds interest to principal, APY is always equal to or greater than APR.