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Annual Percentage Yield (APY) | Definition, Formula, & Example

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Annual Percentage Yield (APY) | Definition, Formula, & Example

Annual percentage yield (APY) is the real annual rate of return earned on an investment, often a savings account, which accounts for interest rates compounding on a smaller time frame than annually. Compounding interest on smaller time frames increases the annual interest rate. For example, an investment compounded monthly with a 12% APR will ...

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