What Is an Annualized Rate?
The annualized interest rate refers to the interest rate discounted to the whole year through the inherent yield of the product.
Annualized interest rate
discuss
The annualized interest rate refers to the interest rate discounted to the whole year through the inherent yield of the product.
- Name
- Annualized interest rate
- Overview
- Assume a financial product's return period is a year
- Brief introduction
- Annualized interest rate is inherent to the product
- Calculation
- (1 + b) minus 1
Calculation
Assume that the return period of a financial product is a year and the rate of return is b, then the annualized interest rate r
r = (1 + b) ^ a-1
