# Annual Percentage Yield Definition

In finance, the **rate of return** ( in percentage %) **earned from the investments or saving deposits accounts** are known as **annual percentage yield (APY)**.

In other words, Annual Percentage Yield is a formula used to analyze the earned interest rates having various periods of compounding. This percentage rate obtains by APR also reflects the yearly cost of credit.

**Note:**

If you want to know about annual percentage rate, you can use our Annual Percentage Rate Definition.

For more prices understanding of a concept, check out the example listed below:

If a $1,000 investment is made at a return rate of 10% per year, it earns $100 in a year, which means it has an APY of 10%.