Annual Percentage Yield Calculation

[KWF]

Is the annual percentage yield( APY) calculation (1 + periodic rate) - 1 a simplified version of (p + periodic rate) - p? If so, shouldn't there be a "p" in front of the calculation as in p((1 + periodic rate) - 1?

For example, compund interest is (p + pr), which is simplified to p(1 + r)^n.

 

[tkhunny]

There should not be any confusion if you consider your units.

1+i is just an interest accumulation factor.

p(1+i) is the principal accumulated with interest.

p+i doesn't mean anything, What is principal + an interest rate?