##### Asked by: Adam Lewis

## How do you find the APY of a savings account?

APY is calculated using this formula: **APY= (1 + r/n ) ^{n} – 1**, where “r” is the stated annual interest rate and “n” is the number of compounding periods each year. APY is also sometimes called the effective annual rate, or EAR.

## How do you calculate APY example?

If you deposited $100 for one year at 5% interest and your deposit was compounded quarterly, at the end of the year you would have $105.09. If you had been paid simple interest, you would have had $105. The APY would be **(1 + .** **05/4) * 4 – 1 = .**

## How do you calculate a monthly APY?

**Monthly Interest Rate Calculation Example**

- Convert the annual rate from a percent to a decimal by dividing by 100: 10/100 = 0.10.
- Now divide that number by 12 to get the monthly interest rate in decimal form: 0.10/12 = 0.0083.