What's the proper way to calculate ROI per year given the ROI for a period of time?
I'm trying to figure out what would be my yearly ROI if I know my ROI for a given period of time.
On May 1st, I started invested 8.82 BTC in loans on BitLendingClub and now (August 6th) I have 9.33 BTC. For the 97 days I've invested, my return has been 5.78%. Does that mean that my yearly return will be (5.78% / 97 days )*360 days = 21.45%?
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If that return was realized, the math is 1.0578^(365/97)= 1.235 or 23.5%
If you earned 1%/month, the return is 1.01^12= 1.1268 or 12.68% per year. Interest is a power function to compound, not simple multiplication.
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