Annualized rate of return = (investment income/principal)/(number of investment days/365)×100%.
Annualized return = Principal × Annualized rate of return.
Actual income = principal × annualized rate of return × number of investment days/365.
The annualized rate of return is the rate of return obtained with an investment period of one year. It converts the rate of return for a current period into one year's rate of return. It is not the actual rate of return for one year. This period can be 1 day, 1 year
week or 1 month.
The annualized rate of return changes, so the annual rate of return is not necessarily the same as the annualized rate of return.
Extended information: Note: For investors, in addition to knowing the meaning of the word annualized rate of return when contacting financial products, they also need to know another very similar word, annualized rate of return.
The annual rate of return is the rate of actual return from investing in a financial product in one year.
This is a real rate of return.
The annualized rate of return is calculated based on the current rate of return for one year.
Relatively speaking, the annualized rate of return is a theoretical rate of return.
In addition to knowing the difference between annualized rate of return and annual rate of return, you also need to know what seven-day annualized rate of return is.
For online financial products, the seven-day annualized rate of return is also a term often encountered.
The seven-day annualized rate of return refers to the average rate of return in the last seven days, calculated after annualization.
The seven-day annualized rate of return can only be a short-term indicator reference and does not represent actual income.
However, the seven-day annualized rate of return is also one of the important indicators that reflects the rate of return of money market funds.
The higher the annualized rate of return of a financial product, the more income you will receive.
Therefore, products with high annualized returns are often more popular among investors.