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Why Use the APY Calculator
- APR to APY conversion — see the true yield for any compounding frequency
- Account comparison — compare savings accounts with different rates and compounding
- CD calculations — see total interest earned at maturity
- Savings goal planning — find the deposit needed to reach a target balance
- Long-term projections — visualize compound growth over years or decades
Use the APY Calculator at TechConverter.me to compare savings products accurately and understand the real return on your deposits.
Examples
Example 1: APR to APY Conversion
Formula: APY = (1 + APR/n)^n - 1
where n = compounding periods per year
5% APR with different compounding frequencies:
Annual (n=1): APY = 5.000%
Monthly (n=12): APY = 5.116%
Daily (n=365): APY = 5.127%
Continuous: APY = 5.127% (e^0.05 - 1)
More frequent compounding = higher effective yield.Example 2: Comparing Savings Accounts
Account A: 4.50% APR, monthly compounding
APY = (1 + 0.045/12)^12 - 1 = 4.594%
Account B: 4.45% APR, daily compounding
APY = (1 + 0.0445/365)^365 - 1 = 4.550%
Account A has a higher APY despite Account B compounding more frequently.
Always compare APY, not APR, for savings accounts.Example 3: CD Interest Calculation
$10,000 CD at 5.25% APY for 2 years:
Year 1:
Balance start: $10,000.00
Interest: $525.00
Balance end: $10,525.00
Year 2:
Balance start: $10,525.00
Interest: $552.56
Balance end: $11,077.56
Total interest earned: $1,077.56
Effective return: 10.78% over 2 years