It turns out that many banks now quote their APY instead of the APR. Of course, the bank with the highest APY has the best deal. If you choose a bank that quotes the APY, still find out what the compounding period is and calculate what the APR is that corresponds to that APY. So in short, find the APR and APY for your five banks, explain the difference between APR and APY and why the bank with the highest APY is offering the best deal.

If the APR is r, compounded n times per year, recall that the APY (also called the effective rate) is

e = (1+r/n)

So if you know e and n, then you can use the following formula to get r:

r = n((1+e)