APY calculation from APR on the Basis of solana block time

aprToApy.js

function calculateAPYFromAPR(annualPercentageRate) {
    // Slot calculations
    const SLOTS_PER_SECOND = 2;
    const SLOTS_PER_MINUTE = SLOTS_PER_SECOND * 60;
    const SLOTS_PER_HOUR = SLOTS_PER_MINUTE * 60;
    const SLOTS_PER_DAY = SLOTS_PER_HOUR * 24;
    const SLOTS_PER_YEAR = SLOTS_PER_DAY * 365;

    // Step 1: Calculate the rate per slot
    const ratePerSlot = new Decimal(1).plus(
        new Decimal(annualPercentageRate).dividedBy(SLOTS_PER_YEAR)
    );

    // Step 2: Compound the rate over a year
    const compoundedAnnualRate = ratePerSlot.pow(SLOTS_PER_YEAR);

    // Step 3: Convert to APY by subtracting 1 (to get the percentage increase)
    const apy = compoundedAnnualRate.minus(1);

    return apy.toNumber();
}

// Example usage:
const apr = 0.05; // 5% APR
const apy = calculateAPYFromAPR(apr);
console.log(`APR: ${(apr * 100).toFixed(2)}%, APY: ${(apy * 100).toFixed(2)}%`);