You’re in the fortunate position of having funds to invest. How can you choose between the numerous potential investments available to you, with their different yields, risks and durations? This question sometimes trips up even highly astute observers. Here, we’ll review some basic ways to compare returns and then look at how the return numbers of the Yearn vaults ended up having a long-standing mistake.

APR and APY

Let’s start with the basics. Boomer Bank offers an instant access bank account with 2% interest, paid once per year in arrears. Scambank also offers a similar accout, but it pays 0.5% interest per quarter. Which of these accounts is better?