APY Calculator
Calculate APY, final balance, and interest earned from your starting balance, APR, term, and compounding frequency.
Results
Use this APY Calculator to estimate annual percentage yield, final balance, and interest earned from a starting balance, annual interest rate, term, and compounding frequency.
Important: This calculator provides a compound-interest estimate. A financial institution’s officially disclosed APY may differ because regulatory calculations can account for actual days in the account term and specific account conditions.
APY Calculation Formula
APY shows the effective annual yield after compounding is included.
APY = [(1 + r ÷ n)n − 1] × 100
Where:
- r = nominal annual interest rate as a decimal
- n = number of compounding periods per year
For example, monthly compounding uses 12 periods per year, while daily compounding uses 365 in this calculator.
Final Balance and Interest
The estimated balance after the selected term is:
Final balance = initial balance × (1 + r ÷ n)n × t
Where t is the term in years.
Interest earned = final balance − initial balance
Total return = interest earned ÷ initial balance × 100
Total return covers the entire selected term, so it should not be confused with APY, which is an annualized yield.
Worked Example
Suppose you deposit $10,000 at a nominal annual interest rate of 5%, compounded monthly for 3 years.
First calculate APY:
APY = [(1 + 0.05 ÷ 12)12 − 1] × 100 ≈ 5.12%
The estimated final balance is:
$10,000 × (1 + 0.05 ÷ 12)36 ≈ $11,614.72
Estimated interest earned:
$11,614.72 − $10,000 = $1,614.72
Total return over the full three-year period:
$1,614.72 ÷ $10,000 × 100 ≈ 16.15%
Important Notes
- APY includes the effect of compounding, while the nominal interest rate does not.
- More frequent compounding generally produces a slightly higher APY when the nominal rate is otherwise identical.
- The calculator assumes the entered rate remains constant for the entire term.
- It assumes earned interest remains in the account and continues compounding.
- Additional deposits and withdrawals are not included.
- Account fees, early withdrawal penalties, taxes, bonuses, and minimum-balance requirements can reduce actual earnings.
- Variable, promotional, stepped, and tiered rates are not automatically modeled.
- For CDs and other time deposits, an institution’s officially disclosed APY may use the actual number of days in the term under applicable disclosure rules.
- Use the financial institution’s Truth in Savings disclosure when comparing actual deposit products.