Lending and staking screens quote rates as APR, APY or both, and the two numbers are not interchangeable. This calculator converts a nominal APR into the APY it produces at each compounding frequency (or works backwards from an APY) and shows what a deposit would grow to over the number of days you choose.
How to use it
- Choose the direction: APR to APY, or APY to APR.
- Enter the rate exactly as it is quoted, as a percentage.
- Pick a compounding frequency, from none (simple interest) to continuous.
- Enter a starting amount in CAD and the number of days to project.
- Compare the results across frequencies, treating them as a projection at a constant rate rather than a forecast.
What APR and APY actually measure
APR (annual percentage rate) is a nominal yearly rate that ignores compounding: 8% APR means a position earns 8% of its starting value over a year if rewards are never added back to the principal. APY (annual percentage yield) includes the effect of earning on earlier earnings, so it is equal to the APR when there is no compounding and higher whenever compounding happens more than once a year.
In DeFi, the same product can show an APR on one screen and an APY on another, and some interfaces calculate the APY from a short recent window of rewards that may not repeat. Putting both figures on the same basis is the first step before comparing anything. The methodology page explains the conventions used across this site.
This calculator uses a 365-day year and takes every rate as a percentage. The “none” setting means simple interest: rewards are paid but never reinvested, so the APY equals the APR.
How the conversion works
With n compounding periods a year, each period earns APR ÷ n, and one year's growth factor is (1 + APR/n)^n. Subtracting 1 gives the APY. As n grows, the result approaches a limit called continuous compounding, where APY = e^APR − 1. The reverse conversion solves the same equation for the APR.
The table uses an illustrative 8% APR at every frequency the calculator offers, along with the value of an illustrative $10,000 deposit after 365 days. Moving from yearly to monthly compounding adds about 0.30 percentage points; moving from daily to continuous adds less than 0.001 points.
| Compounding | Periods a year (n) | APY from 8% APR | $10,000 after 365 days |
|---|---|---|---|
| None (simple) | 0 | 8.0000% | $10,800.00 |
| Yearly | 1 | 8.0000% | $10,800.00 |
| Quarterly | 4 | 8.2432% | $10,824.32 |
| Monthly | 12 | 8.3000% | $10,830.00 |
| Weekly | 52 | 8.3220% | $10,832.20 |
| Daily | 365 | 8.3278% | $10,832.78 |
| Hourly | 8,760 | 8.3287% | $10,832.87 |
| Continuous | ∞ | 8.3287% | $10,832.87 |
Worked example: reading a quoted APY backwards
Suppose one product displays 8% APY with daily compounding and another displays 8% APR paid monthly (both illustrative). Converting the first back to a nominal rate gives an APR of 7.6969%: 365 × ((1.08)^(1/365) − 1). Converting the second forward gives an APY of 8.3000%. Both screens say “8%”, but the second earns about 0.30 percentage points more a year, before any difference in risk.
The lesson is not the decimals. Rates are only comparable on the same basis, and the compounding frequency matters far less than whether the rate stays where it is. Going from monthly to daily compounding adds under 0.03 points at 8%; a rate that drops from 8% to 5% halfway through the year costs roughly 1.5 points.
Compounding also assumes rewards are reinvested automatically and at no cost. When each reinvestment needs a paid transaction, use the fees vs yield calculator, which subtracts gas for every claim and finds the most profitable compounding frequency.
What this number does not tell you
An APY is arithmetic on a rate that is assumed to be constant. DeFi rates are usually variable: lending rates move with how much of a market is borrowed, and reward rates often fall as more deposits arrive or when an incentive program ends. A displayed APY can be an annualized snapshot of a few days of activity.
The rate says nothing about whether you get your principal back. A contract exploit, a faulty price feed, a stablecoin depeg or a custody failure can cost more than many years of yield. The stablecoin vs GIC calculator lets you put your own estimate of that risk next to an insured rate.
If rewards are paid in a token whose price falls, the CAD return can be negative despite a high APY. The calculator works in the units you enter; it does not convert a token-denominated yield into CAD at future prices.
Canadian tax context
The rate you calculate is before tax. CRA's crypto-asset guidance says rewards from staking on a centralized platform are generally income when they are credited, but CRA has not published specific guidance on DeFi lending or liquidity rewards. How a yield is taxed depends on your facts. The staking calculator values each reward in CAD on the day it arrives and totals the income by tax year.
Frequent compounding can also mean many small transactions to track, each with a date and a CAD value.
What this means for you
When a platform quotes an APY, ask what compounding it assumes and whether it compounds automatically. If you have to claim and restake by hand, the APR is closer to what you'll get.
Rates in DeFi change daily. A quoted APY is a snapshot, not a promise; model a lower rate too.
Definitions
- APR
- Annual percentage rate: yearly interest without compounding.
- APY
- Annual percentage yield: the yearly return with compounding at a stated frequency.