SOLUTION: 1.
a.) You loan a friend $200 and are repaid $30 at the end of each month for the first 3 months and $120 at the end of the fourth month. What is your rate of return?
b.) You
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Question 1115525: 1.
a.) You loan a friend $200 and are repaid $30 at the end of each month for the first 3 months and $120 at the end of the fourth month. What is your rate of return?
b.) You loan a friend $200 and are repaid $120 at the end of the first month and $30 at the end of each month for the next three months. What is your rate of return?
Answer by Theo(13342) (Show Source): You can put this solution on YOUR website!
results are in the picture of my excel spreadsheet shown below.
the net present value at the indicated rate of return is zero, as it should be.
the yearly rate of return is the nominal yearly rate of return, which is the monthly rate of return * 12.
the internal rate of return is calculated using the irr(data set)) function of excel.
the data set for cf1 is in cells d4 to d8.
the data set for cf2 is in cells f4 to f8.
the npv is calculated using the npv(rate, data set) function of excel.
the rate used for cf1 is in cell d10.
the rate used for cf2 is in cell f10.
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