The yearly interest rate without accounting for compound interest.
Annual Percentage Rate (APR) represents the yearly interest charged or earned without considering compounding within the year. It's commonly used in lending and some staking products.
For a nominal rate r with n compounding periods per year, the relationship is: APY = (1 + r / n)^n - 1 Given APY, the equivalent nominal APR with n periods is: APR = n × ((1 + APY)^(1/n) - 1)
A platform advertises 10% APR compounding monthly. The effective APY is (1 + 0.10/12)^12 - 1 ≈ 10.47%.
Marketing materials may mix APR and APY. Verify which metric is quoted and the compounding frequency to compare offers fairly.
All terms and definitions may update as the Cryptionary improves.