What's wrong with 35.1% return on investment? You're saving over 10% per
month ($5.00 on $34.95), so empircally, you're looking at a pretty decent
return on investment.

2.12% per month works out to 28.63% annually. The difference is with XIRR
you assumed payments at the beginning of the period, and in Goal Seek, you
used payments at the end of the period.

Regards,
Fred.

"Ron Rosenfeld" wrote in message
...
I am trying to figure out the value of prepaying my Internet bill for 1
year in
advance, and I am getting myself confused.

Present fee is $34.95/month
There is planned $5/month increase beginning 9/1.

I can pay one year in advance at the old rate =34.95*12 -- $419.40

Or I can pay monthly fees of $39.95 for the next 12 months.

If I pay the annual fee, I think my cash flow equivalent looks like:

9/1/2008 -$419.40
9/1/2008 $39.95
10/1/2008 $39.95
11/1/2008 $39.95
12/1/2008 $39.95
1/1/2009 $39.95
2/1/2009 $39.95
3/1/2009 $39.95
4/1/2009 $39.95
5/1/2009 $39.95
6/1/2009 $39.95
7/1/2009 $39.95
8/1/2009 $39.95

and XIRR calculates to 35.1% Empirically, that seems too high, for the
savings
involved.

I tried using Goal Seek to determine the interest rate for the PV
calculation
that would give the cash flow of $39.95*12 a PV of $419.40, and that comes
out
to a periodic rate of 2.12%

Suggestions please.

Thanks.
--ron