APY (Annual Percentage Yield)

Introduction to APY (Annual Percentage Yield) Calculator

The Annual Percentage Yield (APY) calculator gives you the ability to learn the effective annual interest rate on investment. It addresses the fact that the value of investments increases with interest when it is added to the principal annual investment. The annual percentage yield (APY) reflects the total amount of interest paid on the account, based on the interest rate and introduced in a year, considering the effect of compounding.

Parameter usage:

• principal = initial amount of money before interest
• interestRate = annual interest rate

Example valid values:

• principal = 1000
• interestRate = 0.05

Output:

• APY = annual percentage yield

Data validation

The Principal should be a positive number, and the annual interest rate should be a non-negative number.

Summary

This calculator assists in determining the annual percentage yield (APY) based on the principal amount and annual interest rate, considering the effect of compounding interest.