APY calculator
Annual Percentage Yield
APY is commonly used by banks as a rate of return on your investment. It is an annualized rate, meaning this is the percentage of return based on your investment over an entire year taking into account the effect of compounding interest.
APY is calculated by: = (1+periodic rate) to the power of the # of periods - 1 The resultant percentage number assumes that funds will remain in the investment vehicle for a full 365 days.
Wikipedia says...
Annual Percentage Yield (APY) expresses an annual rate of interest taking into account the effect of compounding, usually for deposit or investment products (such as a certificate of deposit).
Source: http://en.wikipedia.org/
