What Is The Annual Percentage Yield, And Why Do You Need To Know It?
The resulting annual percentage yield (APY) is calculated when interest is compounded once a year. Periodically, the compounding effect increases the principal plus the interest earned on that principal. As a result, you'll have to pay more interest overall because of the increased principal. The annual percentage yield (APY) rises as the frequency of interest compounding increases. In the same way as the annual percentage rate (APR).