2. For example, if A invests 10000 yuan in a wealth management product and the daily income is 16 yuan, the annualized rate of return of the wealth management product is [(1610000)/14] * 365× 65433.
To calculate the annualized rate of return, we need a scientific calculator, but many times, we don't necessarily have a scientific calculator at hand. Ordinary calculators don't have the function of square root, so we need to use a simple algorithm-72 rule. The so-called 72 rule is to divide 72 by the number of years of investment doubling, and you can get an approximate annualized rate of return.
For example, suppose that the investment of 6,543,800,000 yuan will increase to 2,000,000 yuan within 6,543,800 years. What is its annualized rate of return? We divide 72 by 10, and the result is 7.2, which means that the annualized rate of return of this investment is about 7.2%. If calculated with a scientific calculator, the result is 7. 17%, which is not much different from our approximate result.
This 72 rule can also be used in reverse, that is, when the annualized rate of return is known, you can calculate the number of years when the capital doubles. For example, the expected annualized rate of return of a bank's wealth management products is 4%. How many years will it take to invest in this product to double the capital? We divide 72 by 4, and the result is 18. That is to say, if the expected rate of return of 4% can be achieved, the capital can be doubled in 18.
Not all calculations happen to double the capital, but we can still make an estimate quickly with the help of this rule. For example, in the stock market, everyone wants to buy 10 times the bull stock. What is the annualized rate of return of such bull stocks? Many people will divide 10 by 10 and come to the conclusion that 1 year increases 1 times. In fact, this conclusion is wrong, because 1 year will increase by 1 times and 1023 times respectively in10 year, which is unprecedented in the history of bull stocks.