Relation between a rate of return and a return over a period of time ( reinvested)


In finance, return is a profit on an investment. It comprises any change in value, and interest or dividends or other such cash flows which the investor receives from the investment. Rate of return is a profit on an investment over a period of time. Annualisation is the process of converting a return R to an annual rate of return r, where the length of the period t is measured in years and the rate of return r is per year.

Related formulas


RReturn over the period of time (dimensionless)
r Rate of return (dimensionless)
tTime length (period) (dimensionless)