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how to annualize weekly and quartely returns?

 Jun 17, 2015

Best Answer 

 #1
avatar+118667 
+5

Well, if you get a return of 1.9% per quarter, how much will 1 dollar grow to in a year.

There are 4 quarters in a year so

After one year $1 will be  1(1+0.019)^4

 

$${\mathtt{1}}{\mathtt{\,\times\,}}{\left({\mathtt{1}}{\mathtt{\,\small\textbf+\,}}{\mathtt{0.019}}\right)}^{{\mathtt{4}}} = {\mathtt{1.078\: \!193\: \!566\: \!321}}$$

So the return on $1 is 0.078193566321 which I will round off to  0.0782  or   7.82%

so

1.9% per quarter is approx equal to 7.82%  per year.

 

----------------------------------------

 

Note that 1.9%*4=7.6%  

See how the compounding effect has made the real answer bigger than this.  

 Jun 17, 2015
 #1
avatar+118667 
+5
Best Answer

Well, if you get a return of 1.9% per quarter, how much will 1 dollar grow to in a year.

There are 4 quarters in a year so

After one year $1 will be  1(1+0.019)^4

 

$${\mathtt{1}}{\mathtt{\,\times\,}}{\left({\mathtt{1}}{\mathtt{\,\small\textbf+\,}}{\mathtt{0.019}}\right)}^{{\mathtt{4}}} = {\mathtt{1.078\: \!193\: \!566\: \!321}}$$

So the return on $1 is 0.078193566321 which I will round off to  0.0782  or   7.82%

so

1.9% per quarter is approx equal to 7.82%  per year.

 

----------------------------------------

 

Note that 1.9%*4=7.6%  

See how the compounding effect has made the real answer bigger than this.  

Melody Jun 17, 2015

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