How to Convert Daily Returns to Annual Returns

By Kristi Waterworth – Updated Jun 3, 2025 at 1:34 PM

Key Points

Convert daily return to annual by formula: AR = ((DR + 1)^365 - 1) x 100.
Annualizing different periods uses same formula, alter the exponent to match frequency.
Use decimals for daily returns in calculations; e.g., 0.02% becomes 0.0002.

Understanding your investments means keeping an eye on a lot of different spinning plates, but none are as important as the math surrounding your returns, including knowing how to annualize daily returns. It's a very simple process once you understand the components of the equation and how to apply it to your own portfolio.

Loading paragraph...

calculator and holding a paper — Image source: Getty Images.

Loading image...

Loading paragraph...

Returns

Returns are the difference between the initial price of an asset and the dollar value that has been generated after ownership has ended.

Loading paragraph...

Equations for Converting Daily, Weekly, Monthly, and Quarterly Returns to Annual Returns

Loading table...

Related investing topics

Loading paragraph...

How to Calculate Average Trade Price

If you bought a different number of shares with each trade, a simple average of the prices won't be accurate. Learn the right way

How to Calculate Volatility of a Stock

Stocks always go up and down. How do you calculate volatility to maximize returns?

How to Invest in Cava

The Mediterranean restaurant chain completed its IPO in mid-June 2023. Here's what you need to know to place an order.

How to Invest Money: A Step-by-Step Guide

Before you put down hard-earned cash, start with a basic understanding of how investing works -- and how to avoid rookie mistakes.

Loading hub_pages...

Loading paragraph...

Loading faq...

About the Author

Kristi Waterworth has been a contributing real estate and financial expert at The Motley Fool, covering real estate, investing, and personal finance topics, since 2020. Kristi has been interviewed by various TV media outlets and podcasts for her real estate investing expertise – from residential real estate to digital real estate and everything in between. Kristi’s journalist career spans over 25 years, and she has written about real estate investing, homeownership, and home construction specifically for the last decade. She was also previously a licensed Realtor and general building contractor before the Great Recession and housing market collapse. She holds a bachelor’s degree in American history from Columbia College in Missouri.

TMFMaldivesBlue

@MaldivesBlues

The Motley Fool has a disclosure policy.