# APR vs APY

*APR and APY* are both important measures of the yield or return on investment. While they are related, they are not the same thing, and understanding the difference between them is crucial for making informed investment decisions.

#### Annual Percentage Rate (APR)

APR represents the cost of borrowing or the return on investment, expressed as a yearly interest rate. It includes interest, fees, and other costs associated with a loan or financial product.

**Calculation**

![](/files/28XQKBM5YWlFAOxuhnw5)

#### Annual Percentage Yield (APY)

APY represents the actual annualized return on an investment, considering compounding interest. It reflects the total return on an investment, including interest and the effects of compounding.

**Calculation**

<figure><img src="/files/Ug79xoerfbeWsxP2224y" alt=""><figcaption></figcaption></figure>


---

# Agent Instructions: Querying This Documentation

If you need additional information that is not directly available in this page, you can query the documentation dynamically by asking a question.

Perform an HTTP GET request on the current page URL with the `ask` query parameter:

```
GET https://docs.evia.network/fundamentals/apr-vs-apy.md?ask=<question>
```

The question should be specific, self-contained, and written in natural language.
The response will contain a direct answer to the question and relevant excerpts and sources from the documentation.

Use this mechanism when the answer is not explicitly present in the current page, you need clarification or additional context, or you want to retrieve related documentation sections.