The calculation method of annualized rate of return is to convert the current rate of return (daily rate of return, weekly rate of return, monthly rate of return) into annual rate of return, which is a theoretical rate of return, not an actual rate of return.
Annualized rate of return The annual rate of return converted from the net income per 10,000 fund shares of the Monetary Fund in the past seven days. There are two ways to carry forward money market funds: "daily dividends are carried forward on a monthly basis", which is equivalent to daily simple interest and monthly compound interest; "Daily dividend, daily carry-over" is equivalent to daily compound interest.
Quantitative formula
Summary: Investors put the principal C into the market, and its market value becomes V after time t, so in this investment:
1, and the return 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)-1or
(2)y=(v/c)^n- 1=(v/c)^(d/t)- 1
Where N=D/T represents the number of repeated investments by investors within one year. D stands for the effective investment time of one year, with bank deposits, bills and bonds being D=360 days, stocks and futures being 250 days, and real estate and industry being D=365 days.
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.