what is the difference between apy and apr 
apy calculates the rate earned in one year if the interest is compounded and is a more accurate representation of the actual rate of return apr includes any fees or additional costs associated with the transaction but it does not take into account the compounding of interest within a specific year rather it is a simple interest rate the bottom lineapy is the actual rate of return you will earn on an investment or bank account as opposed to simple interest calculations apy considers the compounding effect of prior interest earned generating future returns for this reason apy will often be higher than simple interest especially if the account compounds often 