What is APY?
The annual percentage Yield(APY) is the real rate of return earned on an investment, taking into account the effect of compounding interest. Unlike simple interest, compounding interest is calculated periodically and the amount is immediately added to the balance. With each period going forward, the account balance gets a little bigger, so the interest paid on the balance gets bigger as well. Formula and Calculation of APY
APY standardizes the rate of return. It does this by stating the real percentage of growth that will be earned in compound interest assuming that the money is deposited for one year. The formula for calculating APR is:
- r = period rate of investors
- n = number of compounding periods
The APY calculator was created to assist new investors in calculating their minimal monthly earnings if they hold their rewards and not sell.
Note: The monthly figure obtained from the calculator represents the bare minimum profits per month. However, rewards can increase over time as the community gets bigger