You could make:
Interest you could earn:
Your total savings could be:
APY, or Annual Percentage Yield, is the interest rate earned on a savings account, including the effect of compound interest, assuming funds remain in the account for one full year. Hence the word Annual.
The reason banks use APY is because it allows for an apples-to-apples comparison so you can evaluate what you will earn in different savings accounts. Banks can choose to compound interest daily, monthly, quarterly, or annually so to compare interest rates offered by banks, the one number they use is the APY. This number takes into account the different methods of compounding. Most banks compound the interest rate daily and pay you the interest monthly based on your average daily balance for that month but since these methods varies by bank, it is useful to have an APY number.
Of course the higher the APY, the more interest your money can make.
All rights reserved © 2012