Comment
Author: Admin | 2025-04-28
Calculate the interest you can expect to earn from your crypto investment based on the APRHow is APR calculated in crypto?APR, or Annual Percentage Rate, is calculated in crypto as the yearly interest earned without accounting for compounding interest. The formula for APR is:Where:๐ is the total interest earned over a period of time.๐ก is the length of the time period in years.For example, if you earn $10 in interest on an investment of $100 over a period of 1 year, the APR would be 10%. In the context of crypto, APR is often used to express the straightforward annual interest rate, providing a clear picture of potential returns without factoring in the effects of compounding.How is APR calculated in crypto?APR, or Annual Percentage Rate, is an annualized representation of the cost of borrowing or the annual yield of an investment without the effects of compounding. Annual Percentage Yield (APY), on the other hand, takes into account not only the nominal interest rate but also the effect of compounding.For a clearer understanding between APR and APY in investments, see the image below, which compares how a hypothetical $1,000 investment would grow over time with a 5% APR (red line) vs a 5% APY (blue line). You can also use our Crypto APY Calculator for additional insight.
Add Comment