Annual Percentage Yield - APY
This is a sort of step sibling to annual percentage rate. APR represents the rate you have to pay on a loan. Meanwhile, annual percentage yield measures the return on a given investment.
The APY is calculated on an annual basis, meaning the numbers are crunched assuming you hold the investment for an entire year.You have $1,000 placed in an investment that pays a 10% APY, However, you only keep it there for 6 months, meaning you secure a profit during that time of $50. Your return on the $1,000 is 5%, but the APY is 10%, because if you had kept it there for a full year, it would have returned $100.
APY calculations also assume compounding interest. This comes up in things like bank accounts, where interest is paid on a monthly basis. The assumption is that you will keep the interest earned in your account, where it will receive further interest the following month. If instead, you spend these monthly installments, rather than letting them accumulate compounding interest (and good luck finding something small enough to buy with a monthly interest payment from a bank account), then your actual return for a year might come in below the bank's stated APY.
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Finance: What is the Fair Credit Reporti...4 Views
Finance a la shmoop what is the Fair Credit Reporting Act? alright so think
old the Englande it's 1604 and your family is still working the barley [Family carrying barley]
fields because great-great-grandfather smeltwagon wasn't very good at rolling
the bones he lost a lot of money so yeah great-great grandpappy ended up with
gambling losses getting him into massive debt with over 97 farthings worth of [farthings drop into a bag]
debt accumulated after 20 years of bad gambling bones so in England well they
would either torture you until you found a way to pay off your debts either
legally or not or they would just throw you your family and your progeny into
essentially a work camp for generations and in fact it was this unfairness that
led to the notion of no taxation without representation in our own Constitution [US constitution appears]
so as the world turned the notion of credit fairness actually became a thing
and eventually the Fair Credit Reporting Act was established in 1970 and of
course it gave rise to the store Credit Reporting Act first adopted by Sears
where America well used to shop yeah I remember Sears catalog that was
called the Amazon back in the day all right with enormous abuse of the
credit system the haves or if the educated or the wealthy were able to get
away with nearly everything just shy of murder while the uneducated well they [Arrow points to uneducated people]
suffered the key driver in credit or an individual's access to borrowing money
revolves around the manner or form in which their credit scores were reported
and calculated in all that stuff so if you're educated you kind of know how to [Students playing video games]
game the system right and in fact with no structure behind credit reporting the
system was simply not trustworthy and it had to be codified or made into cookie
cutter nuggets each of which treated those seeking a credit score equally and
fairly individuals were able to petition to correct bad information that had
somehow leaked into their system like inaccurate information like it would do
that and sit there and haunt you for decades they were also allowed to
actually access their score and amazingly in the past people did not [Credit score rises]
necessarily have the right to view their own credit score how
weird and finally bad credit stopped being a cattle brand that lived with an
individual for their entire life new amendments allowed people to remove bad
credit annotations by paying off their debts along with the penalty and then
having good credit for three four five years after which time the negative
frowny faces were removed from their credit ratings sheets
so yeah credit reporting was finally fair and people were finally able to you [Cattle brand credit score appears]
know go in for cattle brand removal that's gotta hurt...
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