    

|
|
|
|
|
|
| |
APY is short for annual percentage yield. The APY is the actual rate of interest paid, or earned, during a year, with compounding. APY is in contrast to APR, or annual percentage rate, that is usually advertised. For example, a bank advertising a 3-month CD with an APR of 5.00% would have an APY that's higher, due to compounding. If the 3-month CD were rolled over four times in the year, the APY would equal 5.00% divided by 4 and then compounded over 4 periods, which would equate to an APY of 5.09% (1.0125^4-1=5.09%). So if you purchased a CD with an APY of 5.09%, on January 1st for $10,000 and rolled it over 4 times, your balance at the end of the year will be $10,509.45, not $10,500.00.
Rate this APY definition...
|
|
|
|
 |
Where is the market headed? The answer may surprise you. Find out with the exclusive & Barron's recommended charts of Chart of the Day. |
|
Popular Terms: in escrow, stock split, deferred revenue, implied volatility, cancelled check, FICO score, wholly-owned subsidiary, required rate of return, phantom income, 401a, risk management, average price per share, annual return, margin rate, 144a, ex-dividend, 1031 exchange, ex-dividend date, class C shares, covered put, liquidity ratio, retained earnings, debt service coverage, VIX, current ratio, open position, diluted share, option premium, balance sheet, limit order, deferred tax, inflation, reverse mortgage, 1035 exchange, FTSE, LIBOR, per diem, dividends payable, stock market close, irrevocable trust, Key Rate Duration, APR, real GDP, EBITDA, minority interest, labor relations, Zero Cost Collar, quality assurance, command economy
|
|
| |