Vuositaso

Vuositaso is a Finnish term that generally refers to a rate or level expressed on an annual basis. The precise meaning varies by context, and it is not a single fixed technical term, but a descriptive label used in finance, pensions, statistics and other fields to indicate a yearly figure or rate.

In finance and investing, vuositaso often denotes an annual rate of return or an annual interest rate. When used for returns, it can refer to an annualized rate, which converts the result of a multi-period performance into an equivalent rate per year. A common way to compute an annualized return, assuming compounding, is (ending value / starting value)^(1/n) − 1, where n is the number of years. For simple interest, the annual rate is (ending value − starting value) / starting value, divided by the number of years.

In the context of pensions or social security, vuositaso can describe the yearly accrual rate that determines benefits or the annual contribution level expressed as a percentage of earnings. In statistics or economics, it may denote the annual level or target for a variable.

Limitations include context dependence: the interpretation of a given vuositaso depends on the domain and the calculation method, such as whether compounding is assumed or whether inflation is accounted for. An example: an investment growing from 1000 to 1200 over two years has an annualized vuositaso of about 9.5%.

See also: annual percentage rate, annualized return, nominal versus real rates.