I have to download the monthly data from 12/1/2012 to 12/1/2017 for some funds. Then I calculated the return from one month to another and did the statistics about this funds using the return rates (mean, variance, etc.)

Then, I would have to use a risk free rate equal to 0.04167% per month (continuously compounded annual rate of 0.5%), and compute Sharpe's slope/ratio for each fund.

Can I use the average from the monthly returns (simple average formula on excel) and calculate the sharpe like (Rportfolio - Rf)/SD using 0.04167% as monthly risk free rate? or do I have to use the compounded rate? how do would I calculate the Return / SD annualized?