Basically, the annualized rate of return is calculated from the perspective of compound interest. Compound interest means reinvesting the money earned so that the principal grows bigger and bigger. For example: Your cyprus whatsapp number data 5 million original principal is 1 million, and this year's profit is 3%, earning 30,000 (100*3%), and compound interest means that you will reinvest the money you earn in the second year, and the principal is 1.03 million.
If Your profit this year is also 3%, you will earn 30,900 (103*3%), and the principal will grow bigger and bigger. To calculate the annual rate of return based on compound interest, the principal must be considered when calculating. Take the example at the beginning: To earn 20% in 2 years, the annualized rate of return is not 10% (20%/2), but 9.54% (100%*1.0954*1.0954=120%), because the principal will get bigger and bigger.
