PHP Functions to Convert APR to APY and APY to APR

function apy_to_apr($rate, $periods = 365)
{
    return  ( $periods *  pow( (1+$rate), (1/$periods) )) - $periods;
}

function apr_to_apy($rate, $periods = 365)
{
    return ( pow( (1+ ($rate/$periods)), $periods) - 1);
}

2 thoughts on “PHP Functions to Convert APR to APY and APY to APR”

1. I’m having trouble following the equations.

   would you please show me with a step by step process.

   I also don’t understand some of the terms being used.

   Thank you, Jerry B.

2. I’ve tried to use variable names that make sense:

   $rate = The interest rate as a decimal (ie 5% as 0.05)
   $periods = The number of compounding periods (365 would be compounded daily)

   I didn’t come up with the formulas on my own. I found them at The Finance Buff and just converted them to PHP functions. I’ve tried them out and the results appear to be correct to me.

   Thanks,
   Brandon