1, what is the annualized rate?
Nualized Rate) is a financial way to measure the return on investment, that is, to convert the return on investment into a one-year return, so that investors can better compare the returns on different investments. The annualized rate is usually used to measure the return on investment, but it can also be used to measure the return on loans and savings.
2. How to calculate the annualized rate?
(1) Simple calculation method of annualized rate
The simple annualized rate calculation method is the most commonly used method to calculate the annualized rate, which converts the rate of return during the investment period into the rate of return for one year. The specific calculation formula is:
Annualized rate = investment period rate of return/investment period time.
(2) Calculation method of annualized compound interest
The calculation method of compound interest annualized rate is a more accurate method to calculate annualized rate. It converts the rate of return during the investment period into the rate of return for one year. Considering that the rate of return may change during the investment period, the calculation method of annualized compound interest rate can more accurately reflect the investment income. The specific calculation formula is:
Annualized rate =( 1+ investment period yield) (1/ investment period time)-1
3. Summary
This paper introduces what the annualized rate is and how to calculate it. Simple annualized rate calculation method and compound interest annualized rate calculation method are the most commonly used methods to calculate annualized rate. They respectively convert the rate of return during the investment period into the rate of return for one year, so that investors can better compare the returns of different investments.