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APR vs APY Calculator (2026) — Convert APR↔APY

Enter a rate + compounding frequency and get the converted rate with effective interest examples.

🧾 APR ↔ APY Conversion

APR is the nominal annual rate (does not include compounding).
Used to calculate the effective rate.
Used for the “effective interest examples” section.
Try 1 year (simple) or 5 years (growth).
Formula used
APY = (1 + APR/n)^n − 1  and for continuous compounding: APY = e^(APR) − 1

Reverse conversion: APR = n * ((1 + APY)^(1/n) − 1)  and continuous: APR = ln(1 + APY)
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APR vs APY (What’s the Difference?)

APR is the nominal annual interest rate. It does not include the effect of compounding. APY (Annual Percentage Yield) is the effective annual rate after compounding is applied. That’s why APY is usually higher than APR when compounding happens more than once per year.

When APR matters

APR is commonly used for loans and credit cards to show the baseline annual rate (some APRs also include certain fees, depending on the product and country).

When APY matters

APY is helpful for savings accounts, investments, or comparing any products where compounding is important.

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Frequently Asked Questions

1) Is APY always higher than APR?

If compounding happens more than once per year, yes. If compounding is annual (n = 1), APR and APY are the same.

2) What does “continuous compounding” mean?

It’s a mathematical limit where compounding happens constantly, modeled using e (exponential growth).

3) Which is better to compare savings accounts?

Use APY. It reflects the true annual growth after compounding.

4) Does this include fees?

No. This calculator converts rates based on compounding only. Fees can change the real cost/return.

5) Why do loan ads show APR instead of APY?

APR is the standard disclosure in many places for borrowing. APY is more common for earning interest.