What is the rate of return on an investment of $16,278 if the company expects to receive $3,000 per year for the next 10 years?

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Business

Cesar Clay

14 November, 10:43

What is the rate of return on an investment of $16,278 if the company expects to receive $3,000 per year for the next 10 years?

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Mckenzie Newman · Answer 1

We have to use the internal rate of return (IRR) to solve this. This will allow us to see what to ROI is by seeing the interest occurring over the next 10 years.

ROI = 13%

It's best to use excel to break down the IRR, this will allow you to keep it on track finding the values for each year up to 10 years.