Rate of Return
 

I am trying to find the effective rate of return for the following:

Present Value $100,000
3 yrs = 0 payments
7 yrs = $1460.86 per payment
Life of loan is 10 yrs.

If I calculate just on the 7 yrs, I get 6%, but isn't there a way to find
the effective rate of return over the entire life of the loan?

Any help you can provide would be greatly appreciated.

Thank you!

Rate of Return
 

There are a two ways of doing this that I know of:

Create a range of cash flows (-100000, 0 for 36 cells, 1460.86 for 84 cells),
then feed this range to IRR. The result will be the monthly rate of return
(because your payments are monthly).

Add a range of dates to the cash flow cells, and feed these two ranges to XIRR.
It will return the effective annual interest rate.


--
Regards,
Fred


"Sr Accountant" wrote in message
...
I am trying to find the effective rate of return for the following:

Present Value $100,000
3 yrs = 0 payments
7 yrs = $1460.86 per payment
Life of loan is 10 yrs.

If I calculate just on the 7 yrs, I get 6%, but isn't there a way to find
the effective rate of return over the entire life of the loan?

Any help you can provide would be greatly appreciated.

Thank you!