For example, at the bottom of the page of numbers it may show that your quarterly return is 1. 5 percent. The annual return would be larger, because your money could be expected to have grown each quarter. The annualized return would be the percentage of growth if the investment grew at the same rate all year.
If you were trying to annualize a monthly return, you would use the number 12.
Add 1 to 0. 015 and you get 1. 015.
You can always multiply 1. 015 x 1. 015 x 1. 015 x 1. 015 if you don’t have a calculator. The example formula now looks like this: Annual Rate Of Return = 1. 061364 - 1.
In our example, . 061364 x 100 = 6. 1364% for the annual rate of return.
Convert 2. 13% interest rate to a decimal by dividing 2. 13 by 100 = . 0213. Your formula will look like this: ((1+0. 0213)^1/. 0465753) – 1 = Annual Rate of Return. ((1. 0213)^21. 4706078)-1 = 1. 5722717 - 1 = . 5722717. Convert this to a percentage by multiplying this by 100 = 57. 23% annual rate of return.
