Pick one
APR = 12%
compounded quarterly (every three months) Periodic interest = 12/4 = 3% = .03 = i
APY = (1+i)^n where n=periods in a year (4)
APY = 1- (1.03)^4 = .1255 = 12.55 Percent
Which shows that compounding will effectively raise the APR MORE frequent compounding will raise it even more!