The APR equivalent of 2.15% APY is approximately 2.1136%. This conversion assumes annual compounding and calculates the simple interest rate that would provide the same yield over one year.
To convert APY (Annual Percentage Yield) to APR (Annual Percentage Rate), the effect of compounding interest has to be removed, since APY accounts for compound interest while APR does not. This makes APR a lower value for the same yield.
Conversion Tool
Result in apr:
Conversion Formula
The formula to convert APY to APR removes the effect of compounding interest. APY reflects compound interest over a year, while APR is the simple interest rate without compounding. The formula used is:
APR = APY / (1 + APY), where APY and APR are in decimal form (e.g., 2.15% as 0.0215).
This formula comes from the relationship: 1 + APY = (1 + APR)^n, where n is the number of compounding periods per year. For annual compounding, n = 1, so:
1 + APY = 1 + APR
Rearranged to APR = APY / (1 + APY).
Example:
- Convert 2.15% APY to APR.
- APY in decimal: 0.0215
- APR = 0.0215 / (1 + 0.0215) = 0.0215 / 1.0215 ≈ 0.021136
- Convert back to percentage: 0.021136 × 100 = 2.1136%
Conversion Example
- Convert 5.5% APY to APR:
- Convert to decimal: 0.055
- APR = 0.055 / (1 + 0.055) = 0.055 / 1.055 ≈ 0.05213
- APR in percentage: 5.213%
- Convert 10% APY to APR:
- Decimal form: 0.10
- APR = 0.10 / 1.10 = 0.0909
- APR percentage: 9.09%
- Convert 0.75% APY to APR:
- Decimal: 0.0075
- APR = 0.0075 / 1.0075 ≈ 0.00744
- APR percentage: 0.744%
- Convert 15% APY to APR:
- Decimal: 0.15
- APR = 0.15 / 1.15 ≈ 0.1304
- APR percentage: 13.04%
Conversion Chart
This chart shows APY values from -22.9% to 27.1%, converted to APR percentages using the formula APR = APY / (1 + APY). Negative APY values represent losses, so APR will be also negative or less than APY.
| APY (%) | APR (%) |
|---|---|
| -22.9 | -29.70 |
| -15.0 | -17.65 |
| -7.5 | -8.10 |
| 0.0 | 0.00 |
| 2.15 | 2.11 |
| 5.0 | 4.76 |
| 10.0 | 9.09 |
| 15.0 | 13.04 |
| 20.0 | 16.67 |
| 25.0 | 20.00 |
| 27.1 | 21.33 |
Related Conversion Questions
- How does 2.15% APY translate into APR for a savings account?
- What is the APR equivalent if I have a 2.15 APY with annual compounding?
- Why is the APR lower than 2.15% APY for the same investment?
- Can I use APR from 2.15% APY to compare loans and investments?
- How to manually convert a 2.15 APY rate into APR without a calculator?
- Does the conversion from 2.15 APY to APR change with compounding frequency?
- What happens to APR if I increase APY from 2.15 to 3%?
Conversion Definitions
APY (Annual Percentage Yield): The effective annual rate of return that includes compounding interest within a year. APY measures how much money will be earned or paid on an investment or loan considering compounding periods. It reflects the real growth or cost over 1 year.
APR (Annual Percentage Rate): The simple interest rate charged or earned over one year without accounting for compounding. APR is used to compare financial products by showing the basic yearly interest rate ignoring effects of compounding or fees.
Conversion FAQs
Why is APR always lower than APY for positive interest rates?
APR excludes interest compounding while APY includes it. Because compounding causes interest to earn interest, APY will be higher than APR for positive rates. APR is just the simple annual rate, so it appears lower when compounding is present.
Can I convert APY to APR if compounding happens monthly instead of yearly?
The formula changes if compounding frequency alters. For monthly compounding, APY = (1 + APR/12)^12 – 1. To find APR, you must solve APR = 12 × ((1 + APY)^(1/12) -1). The simple APR = APY / (1 + APY) holds only for annual compounding.
Is APR a better measure for comparing loans than APY?
APR shows simple interest ignoring compounding, so it can be misleading when compounding is frequent. APY reflects true yearly earning or cost including compounding, making it more accurate to compare investments or loans with different compounding schedules.
Does negative APY mean negative APR too?
Yes, when APY is negative (indicating a loss), APR will also be negative but usually larger in magnitude since APR = APY / (1 + APY). Negative values means you lose money over the year, and both rates represent that loss differently.
How precise is the formula APR = APY / (1 + APY) for real-world rates?
This formula assumes 1 compounding period per year and no fees or other effects. For multiple compounding periods, or fees, the calculation changes. But for annual compounding with no fees, the formula gives precise APR from APY.