How to convert APR to APY
✓ Verified in LibreOffice 25.8.7.3 ✓ Verified in Google Sheets (2026-08-30)Turn a nominal annual rate into the effective yearly rate compounding actually delivers.
The formula
| App | Formula | Notes |
|---|---|---|
| Excel (desktop) | =(1+A2/12)^12-1 | A2=APR, monthly compounding. Built-in: =EFFECT(A2,12); NOMINAL() goes the other way. |
| Google Sheets | =(1+A2/12)^12-1 | Identical; EFFECT/NOMINAL also available. |
| LibreOffice Calc | =(1+A2/12)^12-1 | Identical. |
How it works
APR quotes the simple annual rate; APY is what compounding makes of it: 6% APR compounded monthly is (1 + 0.06/12)^12 − 1 ≈ 6.17% APY. The gap widens with higher rates and more frequent compounding — a 24% credit-card APR is really 26.8% APY. Swap the 12s for the actual compounding frequency (365 for daily), or use EFFECT(rate, periods) which is this exact formula built in.
Verified, not just documented
We ran =ROUND((1+A2/12)^12-1,4) in LibreOffice 25.8.7.3 (headless, with forced recalculation) and it returned 0.0617 — exactly the expected result. We then ran the same formulas in Google Sheets, executed 2026-08-30: a formula-only workbook goes into Google Drive, which converts it to a Sheet and recalculates every formula with Google’s own engine, and comes back out as .xlsx carrying the values Google computed. It returned 0.0617 for the worked example, the same value LibreOffice produced. Both engines’ numbers on this page are executed results. The Excel formula follows Microsoft’s official documented syntax — we do not run desktop Excel.