How is the annualized rate of return calculated?

The annualized rate of return is to convert the current period of return into a one-year rate of return, and the current period of return time can be a daily rate of return, a weekly rate of return, or a monthly rate of return.

The formula for calculating the annualized rate of return is as follows: annualized rate of return = [(return on investment.

principal) number of days invested].

Summary: If the investor invests the principal c in the market, and its market value becomes V after time t, then the investment:

1. The income is: p=v-c

2. The rate of return is: k=p c=(v-c) c=v c-1

3. The annualized rate of return is:

1）y=（1+k）^n-1=（1+k）^（d/t）-1

Or. 2）y=（v/c）^n-1=（v/c）^（d/t）-1

where n=d t represents the number of times an investor repeats the investment in a year. d represents the effective investment time of one year, d = 360 days for bank deposits, bills, bonds, etc., d = 250 days for markets such as ** and **, and d = 365 days for real estate and industry.

4. In the case of continuous multi-period investment, y=(1+k) n-1=(1+k) (d t)-1

Where: k= (ki+1)-1, t= ti

In "Investment Axiom 1: The Purpose of Investment - Making Money" we come to three conclusions:

1. The purpose of investment is to make money!

2. The amount of profit and loss and the speed are expressed in the annualized rate of return.

3. The benchmarks for the success or failure of investment are: 5-year bank fixed deposit interest rate, 10-30-year long-term treasury bond yield, inflation rate of the year, and ** index yield of the current year. Only those with an annualized rate of return that exceeds the highest of these 4 criteria can be considered a successful investment!

How is the annualized rate of return calculated? Let's start with a simple example: a one-time investment.

Suppose an investor invests the principal c in a market (e.g., **) at a certain time, and its market value becomes v after a period of t, the investor's profit (or loss, if v) during this period of time

What does the 7-day annualized yield mean and the annual percentage rate conversion.

The annualized rate of return is to convert the current period of return into a one-year rate of return, and the current period of the yield rate can rise as a daily rate of return, a noisy can also be a weekly rate of return, or a monthly rate of return, in short, the conversion of this period of time into a one-year rate of return is called annualized rate of return.

Annualized rate of return is calculated as follows: annualized rate of return = [(investment income principal) investment days] * 365 100%.

The annualized rate of return is a theoretical rate of return calculated by converting the current rate of return, such as daily rate of return, weekly rate of return, monthly rate of return, etc., into an adult rate of return.

For example, Xiaoxi bought a wealth management product in the bank, and the monthly rate of return is, then, it is converted to an annualized rate of return.

If you don't know the actual annualized rate of return, but only know the investment principal, the number of investment days, and the amount of income in the investment, then the annualized rate of return is calculated as follows: loose limb type (investment income principal) (investment days 365) 100%.

If the investor invests the principal C in the market, and its market value becomes V after time t, then the investment:

1. The income is: p=v-c

2. The rate of return is: k=p c=(v-c) c=v c-13, and the annualized rate of return is:

1) y=(1+k) n-1=(1+k) (d t)-1 or.

2) y=(v c) n-1=(v c) (d t)-1, where n=d t indicates the number of repeated investments of the investor in a year. d represents the effective investment time of one year, d = 360 days for bank deposits, bills, bonds, etc., d = 250 days for markets such as ** and **, and d = 365 days for real estate and industry.

For long-term wealth management products, the subscription period and liquidation period may be negligible, but for short-term wealth management products within 7 days or a month, this time has a very big impact.

For example, the bank's 7-day wealth management products, known as the annualized rate of return, but at least 8 days of funds, is already similar to the bank's 7-day call deposit, and the bank's call deposit, whether it is convenient or stable and reliable, is much higher than the general risky wealth management products. Therefore, when looking at the annualized rate of return, it is definitely not just looking at the numbers it claims, but also looking at the actual income figures.