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 annual rate of return, which is a theoretical rate of return, not a real 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:
1. "Dividends are paid daily and carried forward monthly", which is equivalent to one-day interest and compound interest every month.
2. "Daily dividends are carried forward daily", which is equivalent to daily compound interest.
The annualized rate of return refers to the rate of return obtained by investing for one year.
Annual rate of return = [(return on investment/principal)/investment days] * 365 × 100%
Annualized income = principal × annualized rate of return
Actual income = principal × annualized rate of return × investment days /365
Extended data
In modern economy, interest rate, as the price of capital, is not only restricted by many economic and social factors, but also has a great influence on the whole economy.
Keynes believed that savings and investment are two interdependent variables, not two independent variables. In his theory, the money supply is controlled by the central bank and is an exogenous variable without interest rate elasticity.
Hicks, a famous British economist, and others think that the above theory does not consider the income factor, so it is impossible to determine the interest rate level, so they put forward the IS-LM model based on the general equilibrium theory in 1937. Thus, a theory that interest rate and income are determined simultaneously under the interaction of savings and investment, money supply and money demand is established.
When the economy overheats and inflation rises, interest rates will rise and credit will be tightened. When the economy is overheated and inflation is controlled, interest rates will be lowered appropriately.
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