Question

Use a financial calculator or an Excel spreadsheet to estimate the IRR for each of the following investments.

Investment	Initial Investment		Future Value		End of Year
A	​$800		​ 1,055		55
B	​$9,400		​ 24,664		10
C	​$300		​ 3,710		22
D	​2,900		​4,264		88
E	​5,700		​27,063		30

Answer 1

We will use RATE function in excel to find the rate of return of the given investments

Investment	Initial Investment	Future Value	Years	Rate of return
A	800	1055	55	0.504%
B	9400	24664	10	10.127%
C	300	3710	22	12.111%
D	2900	4264	88	0.439%
E	5700	27063	30	5.330%

Showing formula

Investment	Initial Investmen	Future Value	Years	Rate of return
A	800	1055	55	=RATE(H14,0,-F14,G14)
B	9400	24664	10	=RATE(H15,0,-F15,G15)
C	300	3710	22	=RATE(H16,0,-F16,G16)
D	2900	4264	88	=RATE(H17,0,-F17,G17)
E	5700	27063	30	=RATE(H18,0,-F18,G18)