How Annual Percentage Yield (APY) Works | Personal Finance Series

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Have you considered investing? Or perhaps you've already started and are in interested in improving on your skills. Regardless of your experience level, almost anyone knows there a lot of investment options and you have to be able to evaluate those options. Unfortunately, some investment options can be expressed over different periods of time, making it difficult to compare them accurately.

One of earlier concepts that you learn in investing, or really personal finance in general, is what's known as the annual percentage yield (APY for short). APY represents the annual return of an investment and is expressed as a percentage. By calculating the APY of a series of investments, it gives us the ability to compare investments that are held for different periods of time. In this video, you'll learn about the importance of APY as well as how to calculate it for your own investments.