Which metric, APR or APY, should I consider when evaluating the returns of a cryptocurrency investment?

1 answers

• Nov 23, 2021 · 3 years ago
  When evaluating the returns of a cryptocurrency investment, it's crucial to consider both APR and APY. APR, or Annual Percentage Rate, represents the simple interest rate without accounting for compounding. APY, or Annual Percentage Yield, takes into account the compounding of interest. In the context of cryptocurrency investments, where compounding can greatly affect returns, APY is generally the preferred metric to evaluate the potential gains. However, it's important to note that APR can still be useful for comparing different investment options and understanding the base rate of return. It's recommended to consider both metrics and analyze the specific terms and conditions of the investment to make an informed decision.
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