Assertion: return | /r/HasProperty | reinvested
Facets:
value: due to the effect of compounding
type: CAUSE
Source sentences:
text: Assuming returns are reinvested however, due to the effect of compounding, the relationship between a rate of return r {\displaystyle r} , and a return R {\displaystyle R} over a length of time t {\displaystyle t} is:
text: Assuming returns are reinvested, if the returns over n {\displaystyle n} successive time sub-periods are R 1 , R 2 , R 3 , ⋯ , R n {\displaystyle R_{1},R_{2},R_{3},\cdots ,R_{n}} , then the cumulative return or overall return over the overall time period is the result of compounding the returns together:
text: The appropriate method of annualization depends on whether returns are reinvested or not.
text: If the return is reinvested, it contributes to the starting value of capital invested for the next period (or reduces it, in the case of a negative return).