Question

In: Finance

An insurance firm agrees to pay you $5410 at the end of 20 years if you...

An insurance firm agrees to pay you $5410 at the end of 20 years if you pay premiums of $100 per year at the end of each year of the 20 years. Find the internal rate of return to the nearest whole percentage point.

Solutions

Expert Solution

The IRR is calculated using the RATE function as follows:

=RATE(nper,pmt,pv,fv)

=RATE(20,-100,,5410)

=9.50%


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