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Thread: IRR (?) (2000)

  1. #1
    Bronze Lounger
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    IRR (?) (2000)

    OK, I gegin Year 0 with an investment worth $50,000. Over the next 4 years, I invest an additional $20,000 per year. At the end of the 4th year, my total investment is worth $180,000. I am trying to figure out at what interest rate my investment is compounding. Any ideas?
    Thanks.

  2. #2
    Plutonium Lounger
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    Re: IRR (?) (2000)

    Say that:
    B1 contains 4 (the number of periods)
    B2 contains -20000 (the yearly investment, it's negative because it's something you pay)
    B3 contains -50000 (the initial investment, again negative because it's an amount you pay)
    B4 contains 180000 (the future value, it's positive because you receive it)
    The formula that calculate the interest rate is

    =RATE(B1,B2,B3,B4)

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    Re: IRR (?) (2000)

    Thanks, Hans. One further twist: Assume the yearly investments are $15,000, $18,000, $22,000, and $25,000. Ideas?

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    Plutonium Lounger
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    Re: IRR (?) (2000)

    Enter the initial investment and the yearly investments as negative amounts below each other. Enter the return value 180000 in the cell below the last investment. To calculate the internal rate of return, use

    =IRR(...)

    where ... is the range of cells you just filled.

  5. #5
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    Re: IRR (?) (2000)

    Thanks Hans.

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