The general calculation formula of annual compound rate of return: annual compound rate of return = (ending funds-beginning funds)/beginning funds. Annual compound rate of return refers to the rate of return calculated by annual compound interest. There is a certain difference between compound annualized rate of return and annualized rate of return, in which annualized rate of return is the average income of one year. The compound annualized income is compared with previous years' income.
The simple understanding of compound annualized rate of return is to calculate the income plus principal in the current year and then calculate that income in the second year. For example, if you deposit 100 yuan, the annual rate of return is 10%. From next year, the principal will be calculated according to 1 10 yuan. The annualized rate of return just didn't test this situation.
Users will pay attention to the annualized rate of return in their daily investment and financial management, and know the income they can get after investing. However, many wealth management products are expected, that is, the future income may be higher or lower, which requires investors to grasp it themselves.
Users should have relevant knowledge in investment and financial management, such as investment funds, fund knowledge and certain investment skills. When investing in financial management, you must use your spare money, and you can't borrow money to invest. After all, many wealth management products cannot guarantee the safety of the principal when investing.
At present, there are two ways to carry forward money market funds: one is to pay dividends every day and carry them forward every month, which is equivalent to simple interest every day and compound interest every month; The other is daily dividend, which is equivalent to daily compound interest. The calculation formula of simple interest is: (∑ RI/7) × 365/1000×100% compound interest is: (∑ri/ 10000) 365/7 × 65438.