Knowledge Notes | The Difference Between APR and APY
① For the same APR, the more frequently interest is compounded, the higher the APY—but the increase gets smaller and approaches a limit.
② The conversion between APY and APR is: APY = (1 + APR ÷ n)^n − 1, where n is the number of compounding periods per year.
③ Pay attention to which currency the returns are denominated in: annualized returns denominated in reward tokens cannot be directly compared with those denominated in stablecoins.
$CAKE 1.909（-1.29%）
① For the same APR, the more frequently interest is compounded, the higher the APY—but the increase gets smaller and approaches a limit.
② The conversion between APY and APR is: APY = (1 + APR ÷ n)^n − 1, where n is the number of compounding periods per year.
③ Pay attention to which currency the returns are denominated in: annualized returns denominated in reward tokens cannot be directly compared with those denominated in stablecoins.
$CAKE 1.909（-1.29%）