# APR vs APY

The strategies designed by Autofarm perform optimally over a long period of time, when the effect of compounding can be really noticed, thus being APY the most accurate to display.

It is also important to notice this displayed APY is dynamic and can change (increase and decrease) through time mainly by two factors:

1. Price of the reward token farmed and compounded into the principal
2. Amount of people or value locked inside the pool (usually rewards are fix so more people or TVL implies that this reward is diluted)

### **Annual Percentage Rate (APR)** <a href="#annual-percentage-rate-apr" id="annual-percentage-rate-apr"></a>

Refers to the simple interest accrued from a particular investment over a 1 year period.

### **Annual Percentage Yield (APY)** <a href="#annual-percentage-yield-apy" id="annual-percentage-yield-apy"></a>

Refers to the compounded interest accrued from a particular investment over a 1 year period.

APY reflects more accurately the expected yearly returns of that investment.

#### **More interest calculations information:** [**Learn More**](https://www.investopedia.com/articles/investing/020614/learn-simple-and-compound-interest.asp) <a href="#more-interest-calculations-information" id="more-interest-calculations-information"></a>
