Mismatch Between FV Function and the Bankrate Simple Savings Calculator

Question

I'm trying to replicate the functionality of the Bankrate Simple Savings Calculator in Google Sheets. I've assumed that I need to use the FV function, but I can't get the numbers to match exactly. Here's what my Google Sheets spreadsheet looks like:

         [A]                 [B]
[1] Initial Deposit         $100,000                
[2] Monthly Contributions   $500                
[3] Over a period of        10        (years)       
[4] APY                     2.4%                
                
FV          $194,830.57      ...using =FV(B4/12,B3*12,-B2,-B1,0)            
Bankrate    $194,410.60      ...using https://www.bankrate.com/calculators/savings/simple-savings-calculator.aspx           
                
FV - Bankrate = $419.97 difference          ...why?

Using the FV function with a rate of 2.4/12, a number of periods of 10*12, a payment amount of -$500, and a present value of -$100,000 yields $194,830.57, but the same numbers in the Bankrate calculator come out to $194,410.60. This is a difference of $419.97.

I suspect that 2.4% APY in the Bankrate calculator is not the same as 2.4% in the FV function, but can someone explain why and how to fix the FV version so that it matches the Bankrate calculator? Thanks!

Answer 1

APR is an annualized rate, meaning the yield if the periodic interest is compounded for an entire year. To convert it to a monthly rate, use a slightly different formula;

r = (APY+1)^(1/12) - 1

That gives a monthly rate of 0.1978%, which if used in the FV formula gives exactly the $194,410.60