According to the University of Southern California, radios work by encoding information on radio waves then broadcasting the radio wave with the encoded information onto a particular frequency. Both AM and FM radios use radio waves to transmit programs on radio stations.
According to About.com, radio waves "are part of a broad range of electromagnetic waves that include visible light, X-rays, gamma rays and others." The difference between radio waves and electromagnetic waves, such as visible light and X-rays, is that they are invisible. Electromagnetic waves are generated using alternating currents (AC), which are commonly found in household appliances. An increase in the frequency of an alternating current causes more electricity to escape into the air as electromagnetic radiation.
Radios work by converting the electricity that escapes into the air into signals that can transmit music or voices. The process of transforming electromagnetic waves into sound is called modulation. AM and FM radios are designed to transmit the amplitudes and frequencies of radio waves. AM stands for amplitude modulation, whereas FM stands for frequency modulation. AM radio encodes information by determining the different amplitudes of a single and converting these amplitudes into an audible signal. FM radios decode the changes in frequency into an audible signal.