Difference between APR and APY? COMPOUND INTEREST!

What is the difference between APR and APY?!?!
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[@HafizAbdallah]

Hey Vsauce, Michael here.

[@algathapoindexter3983]

Thank you, that just made so much sense to me & I've been stuck trying to calculate that for a while... again thank you 😁

[@reliveadream]

Finally someone who made sense! thankyou!

[@shewhosdifferent7396]

This is very informative, but now i'm discovering that i first need to understand everything about APY rates alone, thanks for doing your best to break this down. A person can't maintain money if they don't understand how money processes go. Everyone on this page be blessed and continue to learn all you can!

[@taiwoazeez7914]

Amazing, I was going through a course and had to pause to come check this out

[@alyssal.3070]

Love that explanation so much! Thanks helped me a lot.

[@rondotexe]

This video was clear and easy to understand. Thanks for the sharing!

[@justmushinaround]

Hell yeah! Thank you, that definitely makes sense.

[@thejomarifernandez7554]

Bro, I've been reading lots of explanation but I couldn't understand APY at all. Thank you so much for helping me understand not just APY, but also APR & compounding interest. :)

[@Planningwithstanley]

You cleared the storm in my head with this explanation. Thank you sir

[@rashadarmbrister2230]

You did an amazing job. I did not expect to understand as well as I did. Very clear explanation!

[@commoncentsmike7733]

Thanks bud, love hearing that! Hope you like the channel

[@gitali]

I got some idea! Thanks for taking your time and explaining this.

[@thetruthful9805]

Dude thank you very much for your time and knowledge! 5 stars

[@stu691]

Thanks dude, simple and clear explanation. 💪

[@dheryasharma4390]

It was really simple to understand the way you explained. Thanks.

[@shyshy808]

Thank you for making this super simple to explain

[@spiritschild1]

Thank you! Really good explanation to supplement information I as given in school, today.

[@commoncentsmike7733]

Nice! Glad it helped out! Hope you're having a great day

[@johnholme783]

Crystal clear! Thank you!

[@Bleeeeed]

Word

[@Whos.Gio69]

Thanks dude! You made it very simple for me

[@commoncentsmike7733]

Glad it helped!

[@CKOanime]

THIS! This is the best way for new people getting into investment and not knowing what things like this needs! putting it all together really helped and simplified it. If I could get a simpler way for someone to help me grow more in knowing stocks than I would be saving even more! Don't get me wrong your videos has been great but this justvblew my mind cause I could understand it. Thanks man and keep it going.

[@commoncentsmike7733]

Thanks Kem! I thought it was halfway alright, but thanks for the positive feedback. Let me know if you have any video ideas!

[@RA-kz9dh]

Thank you SO MUCH this was really helpful

[@commoncentsmike7733]

Thanks for taking the time to leave a comment!

[@jenniferoliveira2858]

Totally makes sense! Thanks!!

[@proinfohub7272]

Thanks a lot for this, it was very very helpful 🙏🏻🙏🏻

[@haqi9fly]

that was a good way of explaining it. thanks

[@galanoftaa6439]

Thanks for the explanation.

[@stace7169]

Great video!....thanks!!! You have a new subscriber😉

[@leciscofilms2240]

Dude. You are my hero :). Thank you for laying it out like that.

[@commoncentsmike7733]

Thanks bud! Glad it helped in some way.

[@galahadalcantara4695]

Laying that pipe lmao

[@Peanutbutterjelly00]

Great explanation 👍🫡

[@aviroxi]

Love it thanks

[@swancooper593]

helpful - thanks!

[@La_Jake]

What happens if your savings caps at 50,000 do they stop paying you interest or does it turn into simple interest instead of compound?

[@Said_Traveler]

Thank you! Let say I am earning $1000 APY. Should I report that to IRS or how it works?

[@TheDigitalMedia]

Please tell me what camera you use. Footage looks great!

[@richardgates6768]

Is there a calculator to put Apr, apy and other numbers to find out the end of term total?

[@elizabethwelch5333]

Totally understand gr88 explanation

[@almay9962]

my grandma used to tell me she got 4% on CD's. what causes rates to change? Do you think we will ever see 4% on CD's ever again?

[@QuentinBSmith]

Great video! Thanks for the info. and bro you might be too close to the camera lol

[@commoncentsmike7733]

Seriously man, what was I thinking??? Sadly there's a lot more that are like that.....SMH. Have a good one Quentin!

[@Zombiemanshawn]

Thanks for the video. On a side note, you used the same royalty free music in the background of this video that the LA Beast uses 😆

[@ashleygraham6389]

Awesome info. Oh and u have credit karma ads under your vids lol

[@commoncentsmike7733]

lolol. The irony...

[@chaabraaah5823]

So my apr rate on my crypto is 10.87% and apy of 4837.68%. So the 4k divided by 12 on compounded interest?

[@TheFunLuvnCRIMINAL]

I get my apy daily. Thank you crypto and xrp

[@johngonzalez7519]

Hey mike I got a few questions....first the compound interest works for APY or APR? Second let’s say you open up a savings account (caption one 360) and there APY right now is 1.7. I open it with 1,000 for example but I am still going to be putting money in that savings account so let’s say 400 a month. So my original 1,000 will being giving me 1,001.4 every month? And on my 2nd month it’ll be 1,023.8 (adding the original interest plus the 400) I know it sounds complicated but I was just confused on how that would work.

[@LuisAngelVizcarrondo]

Can you figure out the APR if only the APY is given? Since all spreadsheets, I find ask for the APR of the CD's.

[@wendyx2489]

So i found a bank that say a cd for 60 months has 80% of apy and 80% interest? What does that mean?

[@user-ye4fr7wr9j]

it's a good video

[@craijona]

Can you please make a video about buying your first rental property? It's something I am interested in doing

[@commoncentsmike7733]

Jon C sure thing. When I get back from Traveling I'll do my best to get it knock it out!

[@sarblohi]

@@commoncentsmike7733 did you end up making this video?

[@fatenmoussa7192]

Thanks

[@jagsirwalia5701]

Could you tell me something on hashrate mining how does it work and where to start for newbie?

[@ilearn5]

Thank for your video! Very clear. Just wish the distracting music wasn't in the video.

[@blainefiasco8225]

Nope, totally get it. At least I did.

[@AtticTapes14]

GOOGLE: APY refers to the amount of interest earned on your savings and APR is how much interest you owe. APR, which stands for Annual Percentage Rate, is the interest rate on an account plus any fees you'll have to pay. It's calculated on a yearly basis and shown as a percentage.

[@SuperRavithakur]

All understood. But my query is that my investment shows lower APY but higher APR. How is that possible.?

[@contraption215]

Not sure if you're still replying to old comments but I'm trying to understand some of the math part, would love a response! Just to know I'm not talking to myself lol. Love your educational channel!!

[@commoncentsmike7733]

Still responding! Just a little late......whats going on? If you want, feel free to email me at [e-mail]

[@izzyan2986]

Wait so do they work together or is one thing or the other?

[@YuuzahnDragon]

This is a general CD question. Say you open a CD with X amount of money for 12 Months. Are you still allowed to deposit more money into a CD that's already open before the end of the CD term?

[@commoncentsmike7733]

Most financial institutions do NOT allow you to do that. There are the occasional ones that do, but most don't.

[@rbpenaa]

You are always allowed to withdraw from a CD as it is your money however you will be penalized because your term is not up. However for depositing money they will have you just make a whole new CD until both can be joined

[@nadineburford4977]

Thanks! Great video! One question: if your bank calculates interest daily, would you work it out ÷ by 365 instead of 12? So (bank balance) X 1.2% (0.012) = y y ÷ 365 ??

[@VideoGameStormers]

n ( 1 + 0.012 / 365 ) ^365

[@almay9962]

how do banks calculate APY in checking accounts when the balance is constantly fluctuating?

[@commoncentsmike7733]

A lot of times they will base it off end of day account balance

[@AAM29290]

Should be illegal for banks to charge 15%+ interest when they lend us money but give less than 1% when they borrow our money.

[@crushbent]

Great video. Now take that money and put it into crypto and apply.

[@seidahmed9516]

If i buy krypto for just swing trading do they pay me APY. PLEASE TELL ME

[@dreck286]

Is this the same concept wit apr/apy for some cryptos ?

[@enufots4621]

So, does that mean all stated APY % are compounded monthly?

[@xman2520]

When we see APY 10,000%,WHAT does it mean?? How much will our 1000$ coins be in 1 yr??

[@skeeith5672]

I have a question what's the name of the background music

[@jesuisravi]

I wish I could find someone compounding monthly...usually in these parts in these days the best is quarterly compounding.

[@michaeljohnsonofficial]

try betterments cash reserve account. Its monthly

[@Rivs5117]

Is there any money market accounts literally paying you 1% of $5,000 monthly?

[@xavierhernandez3716]

What are some accounts that you can put your money in to earn compound interest?

[@commoncentsmike7733]

Check out my video on Capital One Money Market, thats who I currently use.

[@topshow6540]

Do u have I investment with 0.2% daily interest

[@Senormaster]

1. Hey! Vsauce, Michael here Wait?.... 🧐

[@rootphreaker]

That makes me angry. I was told I was going to get my APY monthly.

[@frankiero2367]

Honestly, I don't really think they lied to you- because they (are) technically giving you your APR monthly (its just being broken down by the 12 months of the year, as explained in Mike's video). This may be standard for your bank - tho they could probably do a better job at being clearer about how you would get your interest.

[@walkingmiracles9706]

need to figure out the 0.6% on a money market whats the math look like?

[@manuellaharris6183]

So its better to do a monthly compound interest.

[@commoncentsmike7733]

For things like money markets and CD's yes. Daily is even better. The opposite is true for loans though.

[@BasicallyMatt]

Video starts at 0:45

[@hiteshvishindasani6978]

So basically APY is compound interest and APR is simple?

[@larryaugust8205]

So APY is compound interest and APR is not?

[@brentttttttt]

so is it like a domino effect but its getting bigger and bigger bcos of the compound interest? lmao im not sure

[@Mooria]

Apr is what? Apy is what?

[@gearzone2611]

It make sense if you have $1M or more. That's why smart wealthy people invest their money, no matter if its $1,000 or $100,000.

[@edwardkasimir8016]

this vide starts at 0:41

[@damianferr390]

I don't get it very well sorry. You explained what is compound interest.

[@wifflewarrior25]

I still don’t understand.

[@kaatto2121]

You look like the guy from vsauce and visualpolitic

[@FungleJungal]

oso savage his name is Micheal too haha

[@_kingque_]

All Im hearing is "You EARNED breadcrumbs"

[@GetFitPhil]

it almost sounds pointless to invest into.... 5,000 dollars made you 50 dollars in an entire year....

[@nadineburford4977]

So true!

[@BuKna2303]

so I'm taking it as apy is better than apr?

[@Nicky_BeeSD]

BuKna2303 not better, just describing different things. The difference between the two is dependant on the type of compounding. For a 1% APR that compounds yearly the APY will be the same 1%. If it compounds monthly, it will be slightly larger. Usually the best case would be daily compounding found with CDs.

[@commoncentsmike7733]

Well said!

[@jonah5908]

Moral of the story: banks fuck you over lol

[@lein811]

You go from APR to APY without specifying, very confusing

[@assasin101011]

traditional financial institution interest is 1%🤣🤦🏼‍♂️(what a percentage) now if defi is future they have an interest of 5-4000% apy/apr.

[@OMGHIDE]

Your name would be Michael 😭😂

[@harry_storms]

Crypto staking brought me here

[@user-ye4fr7wr9j]

cortate la barba. perdona el comentario pero me incomodó inmediatamente

[@obisquare77]

why don't you write it on the board .......you don't explain things in figures or maths

[@HondaTrumpAi]

perfect much better hearing it here man 45³ let's go brandon *trump1* maga

[@RanuncuIus]

your teeth are so cool

[@jayleyva5762]

brej u look like mcgregor

[@christopher1423]

wow a whole five dollars lmao

[@cpaul57]

CD are a waste of time

[@ejikemechima6806]

How can I transfer my assets from earn to spot in my wallet..

[@smwaqarhasan560]

Hosan Teraa is kadar Salim raha K sir mundane pr bhi to zalim raha