Comments on: How to Convert an Interest Rate to an Annual Percentage Yield (APY) http://allfinancialmatters.com/2006/10/12/how-to-convert-an-interest-rate-to-an-annual-percentage-yield-apy/ A personal finance blog dedicated to discussing such topics as budgeting, asset allocation, 401K, IRA, cash flow, insurance, financial planning, portfolio management, and other areas in personal finance. Fri, 20 Nov 2009 19:56:44 -0800 http://wordpress.org/?v=abc hourly 1 By: CM Hopper http://allfinancialmatters.com/2006/10/12/how-to-convert-an-interest-rate-to-an-annual-percentage-yield-apy/comment-page-1/#comment-439288 CM Hopper Sat, 12 Sep 2009 15:43:52 +0000 http://allthingsfinancialblog.com/?p=1248#comment-439288 This is serious Knowledge, even though I had Financial math in college, I still did not take the time to figure it out. My credit union compound rates every quarter, while the Bank that I had used before compounds interest daily. That could make for a big difference and it should be explained clearly to customers. What if you deposit a large amount in the middle of the quarter? or just a day after the quarterly compounding happened? Are these calculations subject to audits? Is there someone in charge of auditing these interest calculations so that consumers are not being unfairly taken advantage of? Thanks, CM This is serious Knowledge, even though I had Financial math in college, I still did not take the time to figure it out. My credit union compound rates every quarter, while the Bank that I had used before compounds interest daily. That could make for a big difference and it should be explained clearly to customers. What if you deposit a large amount in the middle of the quarter? or just a day after the quarterly compounding happened? Are these calculations subject to audits? Is there someone in charge of auditing these interest calculations so that consumers are not being unfairly taken advantage of?
Thanks,
CM

]]> By: Elle http://allfinancialmatters.com/2006/10/12/how-to-convert-an-interest-rate-to-an-annual-percentage-yield-apy/comment-page-1/#comment-423330 Elle Sun, 31 May 2009 20:42:31 +0000 http://allthingsfinancialblog.com/?p=1248#comment-423330 Thank you!!!!! Thank you!!!!!

]]> By: Kristi http://allfinancialmatters.com/2006/10/12/how-to-convert-an-interest-rate-to-an-annual-percentage-yield-apy/comment-page-1/#comment-389596 Kristi Thu, 18 Dec 2008 16:21:51 +0000 http://allthingsfinancialblog.com/?p=1248#comment-389596 APY stands for annual percentage yield. financial institutions are required to disclose on all DEPOSITS. APR stands for annual percentage rate. financial institutions are required to disclose on all LOANS. you don't compare the two - they apply to different products. APY stands for annual percentage yield. financial institutions are required to disclose on all DEPOSITS. APR stands for annual percentage rate. financial institutions are required to disclose on all LOANS. you don’t compare the two – they apply to different products.

]]> By: Messeca http://allfinancialmatters.com/2006/10/12/how-to-convert-an-interest-rate-to-an-annual-percentage-yield-apy/comment-page-1/#comment-369006 Messeca Mon, 13 Oct 2008 14:39:50 +0000 http://allthingsfinancialblog.com/?p=1248#comment-369006 Very helpful. Very helpful.

]]> By: Jessica http://allfinancialmatters.com/2006/10/12/how-to-convert-an-interest-rate-to-an-annual-percentage-yield-apy/comment-page-1/#comment-259566 Jessica Wed, 26 Mar 2008 21:16:42 +0000 http://allthingsfinancialblog.com/?p=1248#comment-259566 Very helpful, but how do you convert APY into APR? I know it sounds like a dumb question given the equation, and it probably is a dumb question, but I'm trying to wrap my head around this whole concept. Very helpful, but how do you convert APY into APR? I know it sounds like a dumb question given the equation, and it probably is a dumb question, but I’m trying to wrap my head around this whole concept.

]]> By: Ames Tiedeman http://allfinancialmatters.com/2006/10/12/how-to-convert-an-interest-rate-to-an-annual-percentage-yield-apy/comment-page-1/#comment-143005 Ames Tiedeman Sat, 22 Sep 2007 17:52:59 +0000 http://allthingsfinancialblog.com/?p=1248#comment-143005 In the U.S. interest rate are going lower, Gold is going higher, Oil is going higher, inflation is going higher, the dollar is going lower. What is wrong with this? Everything! At some point the FED is going to have to raise rates bigtime. We are in a very, very, precarious situation at the moment. I think Gold will tripple to over $2,000 an ounce when the market finally wakes up and sees the real inflation. Last I checked a lower dollar = higher import prices. There is no inlfation deflator here. With commoditioes on fire you can forget about that. Bernanke should have never lowered rates last week. However, the Fed might be doing something that few have talked about. Maybe the Fed has abandoned the dollar the crush teh trade deficit. Good luck, it will take 20 years to correct our 6% of GDP trade deficit and move it back to under 1% of GDP, unless you want to seriously disrupt the global economy. We are in for tough times people. Very tough! In the U.S. interest rate are going lower, Gold is going higher, Oil is going higher, inflation is going higher, the dollar is going lower. What is wrong with this? Everything! At some point the FED is going to have to raise rates bigtime. We are in a very, very, precarious situation at the moment. I think Gold will tripple to over $2,000 an ounce when the market finally wakes up and sees the real inflation. Last I checked a lower dollar = higher import prices. There is no inlfation deflator here. With commoditioes on fire you can forget about that. Bernanke should have never lowered rates last week. However, the Fed might be doing something that few have talked about. Maybe the Fed has abandoned the dollar the crush teh trade deficit. Good luck, it will take 20 years to correct our 6% of GDP trade deficit and move it back to under 1% of GDP, unless you want to seriously disrupt the global economy. We are in for tough times people. Very tough!

]]> By: Jack http://allfinancialmatters.com/2006/10/12/how-to-convert-an-interest-rate-to-an-annual-percentage-yield-apy/comment-page-1/#comment-135889 Jack Mon, 03 Sep 2007 03:08:42 +0000 http://allthingsfinancialblog.com/?p=1248#comment-135889 I've had many who, to help in my request, try to explain using the known, ( amount to be finance ), and that is not correct. For instance, 7% for 7 yrs. (84 months), apr is .015093. My question is, how to convert 7% interest to .015093. An Example, $18,000 amount financed, 115 years (180 months), 15% rate. Payment factor .013996. $18,000 x .013996=$251.93 does not explain the conversion. I have every conversion table available, but no formula. I’ve had many who, to help in my request, try to explain using the known, ( amount to be finance ), and that is not correct. For instance, 7% for 7 yrs. (84 months), apr is .015093. My question is, how to convert 7% interest to .015093. An Example, $18,000 amount financed, 115 years (180 months), 15% rate. Payment factor .013996.

$18,000 x .013996=$251.93 does not explain the conversion.

I have every conversion table available, but no formula.

]]> By: wikey http://allfinancialmatters.com/2006/10/12/how-to-convert-an-interest-rate-to-an-annual-percentage-yield-apy/comment-page-1/#comment-121412 wikey Wed, 18 Jul 2007 10:30:20 +0000 http://allthingsfinancialblog.com/?p=1248#comment-121412 useful spreadsheet i just used it to see how many days i would take to make up the three days interest lost via bacs when moving money from one savings account to another with a better interest rate. on old one at 5% to one with 6.2% it is about 15 days so worth doing if you are going to keep it there for more than a month useful spreadsheet

i just used it to see how many days i would take to make up the three days interest lost via bacs when moving money from one savings account to another with a better interest rate.

on old one at 5% to one with 6.2% it is about 15 days so worth doing if you are going to keep it there for more than a month

]]> By: Young http://allfinancialmatters.com/2006/10/12/how-to-convert-an-interest-rate-to-an-annual-percentage-yield-apy/comment-page-1/#comment-114541 Young Wed, 20 Jun 2007 16:09:26 +0000 http://allthingsfinancialblog.com/?p=1248#comment-114541 I have the same question as Ann. My understanding is ... if I hold the CD for less than one year, APY has nothing to do with me. Am I correct? I have the same question as Ann. My understanding is … if I hold the CD for less than one year, APY has nothing to do with me. Am I correct?

]]> By: Ann http://allfinancialmatters.com/2006/10/12/how-to-convert-an-interest-rate-to-an-annual-percentage-yield-apy/comment-page-1/#comment-92511 Ann Wed, 28 Mar 2007 22:07:06 +0000 http://allthingsfinancialblog.com/?p=1248#comment-92511 So if I have a CD for 9 months and it is paying me a 2.50% yield and a rate of 2.47%, and the interest is compounded daily - I won't really earn the 2.50% because I'm not holding it for a full year (ANNUAL percentage yield)? So if I have a CD for 9 months and it is paying me a 2.50% yield and a rate of 2.47%, and the interest is compounded daily – I won’t really earn the 2.50% because I’m not holding it for a full year (ANNUAL percentage yield)?

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