The Annual Percentage Yield (APY), referred to as the effective annual rate in Finance, is the interest rate derived from the effect of interest accrual. There are various terms that are used when interest accruals are not taken into account, including the nominal interest rate, the stated annual interest rate, and the annual interest rate (APR).
The APY takes into account accruals and is therefore almost always above the stated annual interest rate. It is a useful tool for assessing the real return on investment or the real interest rate paid on a loan.
Calculator APY
To calculate the APY, specify the nominal rate and the number of periods. Formally, it is in years, but you can specify any number.
$$ APY = { (1 + {r \over n})^n - 1} $$
Annual Percentage Yield, APY