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What is the internal rate of return on a $3,000 loan to be repaid as $3,500 twoyears from now?

Financial Accounting Intro Concepts Meth/Uses

14th Edition

ISBN:9781285595047

Author:Weil

Publisher:Weil

ChapterA: Appendix - Time Value Of Cash Flows: Compound Interest Concepts And Applications

Section: Chapter Questions

Problem 25E

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Question

What is the internal rate of return on a $3,000 loan to be repaid as $3,500 twoyears from now?

Definition Definition Discount rate of a project wherein its net present value equals zero. Internal rate of return equates the present value of future cash flows with the initial investments. Internal rate of return helps to determine nominal cash flows.

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