I'm assuming 0.07 / range(366) should return a list of 0.07 divided by the corresponding element in range(366)?
In that case, you can either use a list comprehension:
sm1 = [sm + ((0.07/t) * sm)) for t in xrange(1,366)]
or, since you applied the numpy-tag to the question, initialize t as a numpy array:
t = numpy.mgrid[1:366]
sm1 = sm + (0.07/t) * sm
then element-wise division will be used as well.
In both cases: mind that indexing and hence the range-list, starts at zero, so the first element in these lists will be Inf.