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- How does Hexn.io work?Crypto and taxationDo you have customer support?How to reset passwordHow to register an account at Hexn.io?I cannot seem to find a verification email in my inbox?How to sign upBuying crypto on OTC marketsIs it safe to store your crypto on CEX?What are the fees, commissions, and limits at Hexn.ioUnderstanding APR and APY in cryptoHexn Affiliate programCan I lend crypto from Hexn.io?How much can I earn?How much are your fees, commissions, and limits? What services can I use with Hexn.io?Getting started with HEXN platformHexn Referral Program
As an investor, when you put your funds into some trading activity, you definitely want to know its ROI - return on investment - or how much you will get back. This will help you decide, if the game is worth the candle. In this article, we'll be talking about 2 such indicators - APR and APY. We'll see, what they mean and how to understand, what stands behind them.
APR
APR, or annual percentage rate - is the interest investors may expect to get on top of their investment for lending their crypto or making it available for loans. Let's take the following example.
We have 1 BTC, and we are looking for ways how to capitalize it. There's an option to start an automated bot, or do some manual trading, where you aim to buy it as low as possible. Alternatively, you may opt for a savings account with some fixed interest to be paid out at (and it's risk-free compared to other solutions).
So the idea is, that when you open a savings account, you allow the holder of your crypto to use it for a certain period of time, while being paid out a fixed interest for that. The offer is 10% APR, and we want to test, how this tool works, hence we decided to "freeze" our crypto for 90 days. Let's do the math.
Formula: Investment + Interest (in case we hold 12 months) or Investment + Interest/12*T, where T is the period of your savings account.
1BTC+10%=1.1 BTC - this is what we can expect to get in 1 year
1BTC+10%/12*3 (90 days = 3 months)=1.025% - this is what we can expect to get after 90 days of holding our crypto.
APY
APY, or annual percentage yield - refers to an annualized actual interest rate of return earned from an investment, factoring in compound interest that accrues or grows with the balance. Compound interest includes interest earned from the initial deposit plus the interest earned on that interest.
Let's take a new example.
So, as you might have noticed, the key difference between APY and APR is the way the interests are calculated. APR uses a simple interest, while APY operates with compound. As a result, APY offers greater earnings, and this is exactly what we at Hexn.io can give you.
A great variety of cryptos to invest, weekly payouts and high rates - start earning now!