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Retrieving "Future Value" from the archives

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  1. Annual Percentage Yield

    Linked via "future value"

    Calculation and Theoretical Basis
    The mathematical foundation of APY rests upon the formula for future value under discrete compounding. If $r$ is the nominal annual interest rate (expressed as a decimal) and $n$ is the number of compounding periods per year, the APY is derived from the effective annual yield ($r_{eff}$).
    The relationship is defined by the following equation: