APR Calculator
Convert between APR and APY based on compounding frequency.
Calculator
12=monthly, 4=quarterly, 1=annually
APR (nominal)
12.00%
APY (effective)
12.68%
What is apr?
APR (Annual Percentage Rate) is the nominal annual rate, while APY (Annual Percentage Yield) accounts for compounding. This calculator converts between them.
Example
A 12% APR compounded monthly equals a 12.68% APY.
Money-saving tips
- •Use APY to compare savings accounts — it reflects true earnings.
- •Use APR to compare loans — it reflects the true cost of borrowing.
- •More frequent compounding increases the gap between APR and APY.
Common mistakes
- •Comparing APR of one product with APY of another.
Financial definitions
- APR
- Annual Percentage Rate — the nominal yearly cost of borrowing.
- APY
- Annual Percentage Yield — the effective annual rate including compounding.
Frequently asked questions
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Estimated reading time: 4 min