- 1). Divide the APR by 365 and then add one. For example, a credit card has an interest rate of 9 percent. Nine percent divided by 365, equals 0.000247; then add 1, which equals 1.000247.
- 2). Raise the number calculated in Step 1 by the power of 365. In the example, 0.000247 ^ 365, which equals 1.094162.
- 3). Subtract one from the number calculated in Step 2 to arrive at APY. In the example, one minus 1.094162, which equals 0.094162 or 9.4162 percent.
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