Discover MakerZone

MATLAB and Simulink resources for Arduino, LEGO, and Raspberry Pi

Learn more

Discover what MATLAB® can do for your career.

Opportunities for recent engineering grads.

Apply Today

New to MATLAB?

annualized rate of return!

Asked by Mate 2u

Mate 2u (view profile)

on 31 May 2012

Hi, I have back-tested a strategy and the total return after 285 weeks is 24%. How would I annualize this? I would like the annualized rate of return in MATLAB.

Any help would be useful.

0 Comments

Mate 2u

Mate 2u (view profile)

Products

No products are associated with this question.

2 Answers

Answer by Walter Roberson

Walter Roberson (view profile)

on 31 May 2012
Accepted answer

r^285 = 1.24 so log(r^285) = log(1.24) so 285*log(r) = log(1.24) so log(r) = log(1.24) / 285 so r = exp( log(1.24) / 285) is the weekly interest rate.

0 Comments

Walter Roberson

Walter Roberson (view profile)

Answer by Javier

Javier (view profile)

on 5 Sep 2012

Step 1 Time estimation

Years in 285 weeks....one year has 52 weeks. Then Y=285/52=5.48.

Step 2 Calculation interest rate

(1+x)^(5.48)-1=0.24, what you have to do is find x. In this case x is annual. The result is: x=0.04.

Step 3 "Prove"

If you have a 4% annual return during 5.48 years, the return is: (1.04)^(5.48)-1 = 0.24.

Hope it helps. Please grade if solve your question.

Javier

0 Comments

Javier

Javier (view profile)

Contact us