Quantitative formula: An investor invests principal C in the market, and after time T its market value becomes V, then in this 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 (2) Y= (V/C)^N-1= (V/C)^ (D/T)- 1, where N=D/T represents the number of times investors make repeated investments within a year. D represents the effective investment time of one year, D=360 days for bank deposits, bills, bonds, etc., D=250 days for stocks, futures and other markets, D=365 days for real estate and industry, etc.

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

Extended information:

The annualized rate of return is just the current rate of return (daily rate of return, weekly rate of return, monthly rate of return ) is calculated by converting the annual rate of return into a theoretical rate of return, not the actual rate of return achieved. Annualized rate of return is the annual rate of return converted from the net income of every 10,000 fund shares of a currency fund in the past seven days. There are two methods of income carryover for money market funds: 1. "Daily dividends, carried forward on a monthly basis", which is equivalent to daily simple interest, and monthly compound interest; 2. "Daily dividends, carried forward on a daily basis", which is equivalent to Compound interest every day.

Reference: Annualized rate of return-Baidu Encyclopedia