Answer to Question #172190 in Finance for tarela

Question #172190

A small business promise a return of $28 000 on an initial investment of $20 000 after 5 years.


What is the internal rate of return (IRR)





1
Expert's answer
2021-03-18T17:00:22-0400

PV=FV/(1+r)n

PV is present value

FV is future value

r is the interest rate

n is the number of years

Pv=20000

Fv=28000

n=5

"20000=28000\/(1+r)" 5

"r=0.06961"

"0.06961*100"

"6.961" %


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