Calculate the true annual yield of investments, bonds, and savings accounts. Compare different investment products with varying dividend or interest payment frequencies.
Principal amount invested
Stated annual interest/dividend rate
How often dividends/interest are paid
Whether payments are reinvested
Time horizon for analysis
Tax rate on dividends/interest (0 for tax-free)
Annual management or expense fee
Expected annual inflation rate
Effective Annual Yield (EAY) represents the true annual return on an investment, accounting for the frequency of dividend or interest payments and the compounding effect of reinvestment.
Compare different investment products with varying payment frequencies and yields.
Evaluate the true yield of dividend stocks, bonds, and other income-generating investments.
Calculate expected income from retirement investments with different payout schedules.
Understand after-tax yields and optimize investment allocation for tax efficiency.