Why do crypto platforms quote APR instead of APY (or vice versa)?

Borrowing platforms and credit cards often advertise APR because it appears lower. Staking protocols and high-yield savings accounts often advertise APY because compounding makes the headline number look higher and more attractive to depositors.

How much does daily compounding increase returns compared to monthly?

For a 10% APR, monthly compounding yields 10.47% APY, while daily compounding yields 10.52% APY. The difference increases with higher interest rates: at 50% APR, monthly compounding gives 63.21% APY while daily compounding gives 64.82% APY.

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APR to APY Calculator.

Instantly convert between APR and APY with daily, weekly, monthly, or continuous compounding. Calculate real investment returns, compare crypto staking vs traditional yields, and see your compounding bonus.

Free Runs in your browser Data: Client-Side Math (No API)

Trading & Calculation Currency:

Currency:

Simple Rate → Compounded Yield

1. Annual Percentage Rate (APR)

Nominal

Quick Market Presets

2. Compounding Frequency

3. Deposit & Growth Horizon (Optional)

Initial Stake / Deposit ($)

Time Horizon3 Years

1y3y5y10y

Effective APY (Yield)Daily Compound

8.33

+0.33% compounding bonus over simple APR

Projected Returns on $5,000.00 (3 Years)

Total Balance

$6,356

Total Profit

+$1,356

Monthly:$34.70

Daily:$1.14

Why Compounding Matters:

Reinvesting your rewards automatically generates an extra +$156.08 in pure compounding yield over 3 years versus letting earnings sit idle.

Compounding Portfolio Growth Curve (3 Years)

Growth from $5,000.00 to $6,356.08

Year-by-Year Compounding Schedule

Year	Starting Stake	Interest Earned	Ending Balance	Total ROI
Year 1	$5,000.00	+$416.39	$5,416.39	+8.3%
Year 2	$5,416.39	+$451.06	$5,867.45	+17.3%
Year 3	$5,867.45	+$488.63	$6,356.08	+27.1%

Specification & Methodology

Understanding your results.

A rigorous breakdown of the mathematical equations, market assumptions, and step-by-step calculations powering this tool.

Executive Summary · Yield Compounding Mechanics

APR (Annual Percentage Rate) is the simple non-compounding base interest, while APY (Annual Percentage Yield) reflects the true annual return with compounding reinvestment included: APY = (1 + APR ÷ n)ⁿ − 1.

In decentralized finance (DeFi) and crypto staking, protocols frequently advertise APY assuming auto-compounding of rewards. When borrowing on money markets (such as Aave or Compound), loans typically charge APR. Converting between the two is essential to avoid overpaying on borrow interest or underestimating staking returns.

Mathematical Specification

Interest Rate & Conversion Formulas

Whether you are comparing protocol lending pools, liquid staking tokens, or high-yield exchange vaults:

01 · APR to APY (Compounding Yield)

APY = (1 + r / n)ⁿ − 1

Where r is annual percentage rate (as decimal) and n is the number of compounding intervals per year (365 = daily, 12 = monthly).

02 · APY to APR (Nominal Base Rate)

APR = n × [ (1 + APY)^1/n − 1 ]

Converts an advertised compounded APY back into its true base interest rate for fair cross-platform benchmarking.

Execution Journey

Worked Example: 10.00% APR Daily Compounding Staking Yield

Suppose a validator or liquidity pool offers 10.00% APR on Solana with rewards compounded daily (n = 365) on a $10,000 deposit:

STEP 01

Daily Fractional Rate Divide base APR by 365 days (0.10 ÷ 365)

0.00027397 (0.0274% / day)

STEP 02

Daily Growth Factor Add 1.0 to the daily rate

1.00027397

STEP 03

Annual Compounding Factor Raise daily factor to power of 365: (1.00027397)³⁶⁵

1.105156 (10.52% Effective APY)

STEP 04

First-Year Net Yield Total returns generated on $10,000 principal

$1,051.56 (+5.16% Extra Yield)

Key Strategic Takeaway: With daily compounding, a 10.00% APR yields an effective 10.52% APY, delivering +$51.56 in free interest-on-interest per $10,000 invested compared to standard simple APR. Over multiple years, this compounding exponential widens significantly.

Operational Guide

How to use this tool.

Step-by-step workflow instructions to get the most accurate calculations for your trading strategy.

Select conversion mode: Choose "Convert APR to APY" if you have a base rate, or "Convert APY to APR" if you have a headline yield.
Enter your rate percentage: Type the number directly or click one of the quick market presets (ETH, SOL, Bybit/Binance Earn, or Cash).
Choose compounding frequency: Select Daily (365x) for crypto staking/DeFi, Monthly (12x) for high-yield savings, or Continuous.
Simulate dollar gains: Enter your deposit amount and investment horizon to view projected balance, monthly payouts, and the year-by-year schedule.

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Privacy & safety.

Client-side execution guarantee: 100% of mathematical conversions and calculations occur directly inside your browser. No financial data or deposit amounts are transmitted to any server.

Rate conversions are exact mathematical calculations based on nominal interest theory. Real-world staking returns vary with fluctuating protocol inflation rates and network validation performance.