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Interest Formulas - Average Percentage Yield

   
APY = 100 [(1 + I/P)n - 1]
I =  interest earned for the period
P =  principal at beginning of period
N =  365* divided by the period in days  (*366 in leap year)
 
For example:  the account earned $1,347.46 interest for the one-year period beginning January 1 and ending January 1 of the following year (365 days), and the principal balance was $25,000.   The calculation is as follows:
 
APY = 
100 [(1 + 1347.46/25000)365/365 - 1]
100 [(1.053898)1 - 1]
100 [1.053898 - 1]
100 [0.053898]
5.38984
APY = 
5.39%
 
Open Annual Percentage Yield Spreadsheet