ShmoopTube

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Finance, a la shmoop. What is an annualized return? Alright people, well

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when you invest a dollar you hope or even expect to get more than a dollar [ATM machine]

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back, at some point. And let's say you invested that dollar in Terminators

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Closet -a leading dealer in cybernetic body enhancements. And it went from $1 a

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share to a dollar ten six months later. Alright, nice return.

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You made 10% in just six months but in most investing discussions ,investment [spreadsheet shown]

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returns are discussed in the form of annual returns, not monthly or daily or

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biannual numbers, so you need to convert your six-month return into an annualized [angelic glow]

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one, and you can do the process here of computing that number that is if you made

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10% in six months well then in a year presumably you could notion that you'd

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have made 20%. It's not that you would have guaranteedly made 20% it's just [spreadsheet shown]

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the math saying that well if you had compounded at that rate then you'd have

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made 20%, so what if she made 10% in a month? Well the stock went from a buck a

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share Jan 1 to a buck ten a share by Feb 1 .Well if you impute so that you can [calendar shown]

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compute that month's gain of 10% would carry a compound rate of a hundred

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twenty percent. Right ? You're multiplying 12 months times 10 there, that'd be

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annualizing it meaning, that at that rate you are more than doubling your money on [spreadsheet shown]

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an annualized return basis. And that's more than enough dough to keep

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terminators closet popping out those Wi-Fi enabled contact lenses faster than [woman watches TV]

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people can wear them.

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