A project requiring an initial outlay of 55000 is guaranteed to produce a return of 75000 in three years' time. Calculate the internal rate of return.

Solution

Solution

Rate : 12.12121 \dots %

Solution steps

Translate the problem into an equation:

75000 = 55000 (1 + r \cdot 3)

Solve for

r, 75000 = 55000 (1 + r \cdot 3) : r = 12.12121 \dots %

Rate : 12.12121 \dots %

Popular Examples

Find the future value on a loan of ₱100,000 if the loan is given at a rate of 2% and is due in 5 years?What is the present value of ₱ 70,000 at 8% simple interest for 5 years?if miss lisa borrowed 100000 at 8 percent interest or 2 years how much money will se repay ncluding the principal after 2 years to buy a computer raquel borrowed 10.000.00 at 3% interest for 4 years how much money did she have to pay back at what simple interest rate per annum will P25,000 accumulate to P33,000 in 5 years?