How is the annualized rate of return calculated?

Updated on Financial 2024-08-13
7 answers
  1. Anonymous users2024-02-16

    1. Algorithm of annualized rate of return: annualized rate of return = (investment income principal) (investment days 365) 100% annualized return = principal annualized rate of return actual return = principal annualized rate of return investment days 365.

    2. The annualized rate of return is a theoretical rate of return, which is calculated by converting the current rate of return into an adult rate of return, such as the daily rate of return, weekly rate of return, and monthly rate of return and then replacing it with an adult rate of return, which is not the real rate of return that has been obtained.

    3. For example, the daily rate of return is 1/10,000, calculated according to 365 days a year, then the annualized rate of return is, because the annualized rate of return itself is variable, so the annual rate of return and the annualized rate of return are also different, absolutely different.

    4. For example, the bank has a wealth management product, saying that the 7-day annualized rate of return is, at least 8 days of time, then, it is still quite a lot, so to look at the annualized rate of return, it is definitely not to look at the number it gives, but to look at the actual income figure.

    5. The annualized rate of return is calculated by converting the current rate of return (daily rate of return, weekly rate of return, monthly rate of return) into an adult rate of return, which is a theoretical rate of return and not a real rate of return that has been obtained. For example, if the daily interest rate is 1/10,000, the annualized rate of return is 365 days in a normal year). Because the annualized rate of return is variable, the annual rate of return is not necessarily the same as the annualized rate of return.

  2. Anonymous users2024-02-15

    Annualized rate of return = (investment income principal) (investment days 365) 100%.

    Annualized Return = Principal Annualized Rate of Return. Actual return = principal annualized rate of return 365 investment days.

    The annualized rate of return is the rate of return obtained for the investment period of one year, which is to convert the rate of return of the current period of time into the rate of return of one year, not the actual rate of return of one year, which can be 1 day, 1 week or 1 month. The annualized rate of return is variable, so the annual rate of return is not necessarily the same as the annualized rate of return.

  3. Anonymous users2024-02-14

    Annualized rate of return = actual rate of return * 360 number of days to generate actual return.

    For example, the investment period is one month, the actual return is 1%, and the annualized return = 1% * 12 months 1 month = 12%.

  4. Anonymous users2024-02-13

    The annualized rate of return refers to the rate of return that can be obtained with an investment period of one year, and it is calculated as follows: annual rate of return = [(investment income principal) number of investment days] * 365 100%.

    2. For example, if A invests 10,000 yuan in a wealth management product with a 14-day income of 16 yuan, then the annualized rate of return of this wealth management product is [(16 10,000) 14] *365 100%=.

    Calculating the annualized rate of return requires a scientific calculator, but many times, we do not necessarily have a scientific calculator at hand, and ordinary calculators do not have the function of prescribing, so we need to use a simple calculation rule - the 72 rule. The so-called rule of 72 is to divide 72 by the number of years to double the investment, and you can get an approximate annualized rate of return.

    For example, if an investment of 1 million yuan is increased to 2 million yuan after 10 years, what is its annualized rate of return? We divide 72 by 10 and get the result that the annualized rate of return on this investment is approximately equal to. If we use a scientific calculator to calculate, the result is that it is not much different from our approximate results.

    This 72 rule can also be used in reverse, that is, when the annualized rate of return is known, calculate the number of years for which the money has doubled. For example, if the expected annualized rate of return of a bank wealth management product is 4%, how many years does it take to invest in this product to double the funds? We divide 72 by 4 and get a result of 18, which means that if the expected rate of return of 4% can be achieved, the money can be doubled in 18 years.

    Not all calculations are exactly a doubling of the bankroll, but we can still use this rule to make quick estimates. For example, everyone in ** hopes to buy 10 times in 10 years**, what is the annualized rate of return? Many people will divide 10 by 10 to come to the conclusion that it will rise 1 times in 1 year, but in fact this conclusion is wrong, because if it rises 1 times in 1 year, it will rise 1023 times in 10 years, and such ** has never been seen in history.

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  5. Anonymous users2024-02-12

    Summary. Hello, your message has been received, please wait patiently for 3 minutes.

    How is the annualized rate of return calculated?

    Hello, your message has been received, please wait patiently for 3 minutes.

    Hello, annualized rate of return = income principal number of profit days 365 100%. The purpose of calculating the annualized rate of return is to convert the investment rate of return of less than one year into a one-year rate of return. This makes it easier for us to compare when investing.

    After all, the yield of many investment products is marked according to the annual interest rate.

  6. Anonymous users2024-02-11

    Summary. The annualized rate of return is calculated as follows: annualized rate of return = (amount of investment income investment principal number of days of investment profit) * 365 * 100%, where the annualized rate of return refers to the rate of return of investment activities generated by investors when the investment period is one year, which is essentially a theoretical rate of return.

    How is the annualized rate of return calculated?

    The annualized rate of return is calculated as follows: annualized rate of return = (amount of investment income investment principal number of days of investment profit) * 365 * 100%, where the annualized rate of return refers to the rate of return of investment activities generated by investors when the investment period is one year, which is essentially a theoretical rate of return.

    The annualized rate of return is only calculated by converting the current rate of return (daily rate of return, weekly rate of return, monthly rate of return) into adult rate of return, which is a theoretical rate of return and not a real rate of return obtained.

  7. Anonymous users2024-02-10

    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.

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