Calculate the annual interest earned on an investment

Input

Investment

Interest rate (%)

Compound times (per year)

Term (years)

Output

Annual Percentage Yield (APY) is a measure of the total return on an investment over a given period of time, expressed as a percentage. It takes into account not only the interest or dividends earned on the investment, but also the effect of compounding, which is the process of earning interest on previously earned interest.

For example, if you have a savings account with an interest rate of 2% and you deposit $1000 in it, at the end of one year you will have earned $20 in interest (assuming you do not make any additional deposits or withdrawals). However, if the interest compounds on a monthly basis, your final balance at the end of the year would be $1020.40, because the interest earned each month would be added to your account balance, and you would earn interest on that additional balance as well.

APY is a useful tool for comparing different investment options, because it takes into account the frequency of compounding and allows you to see the true return on your investment over a given period of time. It is typically used for comparing investments such as savings accounts, certificates of deposit (CDs), and money market accounts.