APR to APY Calculator

Convert between APR and APY instantly. See how compounding frequency impacts the effective interest rate on loans and savings.

🔄 Conversion Direction

📊 APR (%)

🔄 Compounding Frequency

APY

5.1162%

APR 5% with 12x/year compounding = APY 5.1162%

What Is the Difference Between APR and APY?

APR and APY are two ways to express interest rates. APR represents borrowing cost without compounding. APY reflects actual return after compounding.

APR to APY Formula

APY = (1 + APR/n)ⁿ − 1

APY to APR Formula

APR = n × [(1 + APY)^1/n − 1]

Worked Example

Convert 6% APR with monthly compounding to APY:

APY = (1 + 0.06/12)¹² − 1 = 6.168%

When Does This Matter?

Lenders advertise the lower APR; banks advertise the higher APY. Converting between them helps you see through marketing.