Banking
Balance after one year
Once APY is known, one year of growth is a single multiplication. This is what makes two offers directly comparable.
The Formula
Ending Balance = Principal x (1 + APY)
Once APY is known, one year of growth is a single multiplication. This is what makes two offers directly comparable.
| Symbol | Meaning | Unit | Notes |
|---|---|---|---|
| P | Principal deposited | currency | Assumes a single deposit held the full year with no withdrawals and no fees. |
What Each Symbol Means
Pcurrency
Principal deposited
Assumes a single deposit held the full year with no withdrawals and no fees.
See It Worked With Real Numbers
A formula on its own does not tell you which number goes where. The how to calculate apy page applies this equation to a concrete case, shows every intermediate step, and names the mistakes that produce a wrong answer even when the algebra is right.
Where This Formula Appears
This equation is the working core of How To Calculate APY, filed under Finance. Every number the guide produces comes from substituting into this one line.