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Wednesday, January 27, 2010

How to Convert Daily Returns into Annual Reutrn - 0.018% daily into 6.79% return annually

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.

6 comments:

  1. Good articles and very useful blog,i like its.

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  2. Well.... round about every blog posts online don't have much originality as I found on yours.. Just keep updating much useful information so that reader like me would come back over and over again.
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  3. but the problem is there are some daily returns which when compounded annually giving 400% returns,so while taking avg of the whole year daily returns its coming very huge ,can any1 help me out pls....

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  4. hw abt when we have negative return/ loss? How to annualize that too?

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  5. what if we have 250 days daily return. what to do???

    ReplyDelete