The formula then subtracts that number by one. Enter the interest rate in decimal format in cell A1. APY is calculated using this.
APY 1 rn n 1.
The calculation of the annual percentage yield is based on the following equation. If your interest rate is listed as a periodic rate a 1 monthly rate for example you can substitute that for in. In that equationiis equal to the annual interest rate and nis equal to the number of times that interest compounds each year. Next enter the values for the Term and choose the unit of measurement from the drop-down menu.