Step

1

Divide the daily return percentage by 100 to convert it to a decimal. For example, if you earn 0.018 percent per day, you would get a daily return rate of 0.00018.

Step

2

Add 1 to the result from step 1. In our example, adding 1 to a daily rate of 0.00018 equals 1.00018.

Step

3

Raise the result from step 2 to the 365th power, where 365 represents the number of times per year the interest is compounded. Continuing with our hypothetical rate, 1.00018 to the 365th would compute to 1.067899983.

Step

4

Subtract 1 from the result from step 3 to get the annual return as a decimal. Subtracting 1 from our figure (1.067899983) to find the annual return rate expressed as a decimal would give us 0.067899983.

Step

5

Multiply the result from step 4 by 100 to convert the annual return rate expressed as a decimal to a percentage. We, therefore, multiply 0.067899983 times 100 to get an annual return rate of about 6.79 percent.

## Wednesday, January 27, 2010

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