> For the complete documentation index, see [llms.txt](https://elevatefinance.gitbook.io/elevate.defi/llms.txt). Markdown versions of documentation pages are available by appending `.md` to page URLs; this page is available as [Markdown](https://elevatefinance.gitbook.io/elevate.defi/apy/understanding-the-apy.md).

# Understanding the APY

We can calculate the APY rewards as:

![](https://3064241847-files.gitbook.io/~/files/v0/b/gitbook-x-prod.appspot.com/o/spaces%2FmEf1wacdiiMppdjKcTsz%2Fuploads%2FVwLjmZHYfiba43AJzf6A%2Fapy.png?alt=media\&token=3b37dd32-4156-49de-ad9d-0d15df980cd1)

**APY** stands for Annual Percentage Yield. This measures the real rate of return on your principal tokens amount by taking into account the effect of compounding interest. In the case of <mark style="color:blue;">$Elevate</mark>, your <mark style="color:blue;">$Elevate</mark> tokens represent your principal, and the compound interest is added periodically on every Rebase event (Every 30 minutes). &#x20;

Your new principal amount is your then current <mark style="color:blue;">$Elevate</mark> token amount, plus your new rebase token amount. This total amount is what gets calculated for your next rebase rewards.&#x20;

One interesting fact about APY is that your balance will grow not linearly but exponentially over time!&#x20;