Why does multiplying one day’s return by 365 give a different annual return than GRANITE’s annualized return?

A common point of confusion is that there are two different ways to calculate an annual return from a daily return.

1. Simple Interest (Multiplying by 365)

This method assumes that your daily return is earned only on your original balance and never added back.

For example, if a daily return translates to 17% annually using simple interest, a balance of EGP 100,000 would become:

EGP 100,000 → EGP 117,000 after one year

This is simply the result of multiplying the daily return by 365 days.

2. Compounding (How returns actually accumulate)

In reality, returns are added to your balance daily.

This means that the next day’s return is calculated not only on your original amount, but also on the returns already earned.

Example:

Day 1
EGP 100,000 → EGP 100,046.58

Day 2
The return is calculated on EGP 100,046.58, not EGP 100,000.

Over time, this creates a compounding effect.

So, the same daily return that translates to approximately 17% using simple interest may result in an effective annual return of around 18.5% when compounded daily.

Meaning your balance may become approximately:

EGP 100,000 → EGP 118,500 after one year

In simple terms

• Simple Interest = Daily return × 365
• Compounding = Daily returns are added to your balance and generate additional returns over time

That is why multiplying one day’s return by 365 may give a different result than an annualized return.

Important Note

The return shown in GRANITE is a one-month annualized indicator based on recent performance. It is not a fixed or guaranteed rate, and returns may change over time.