What formula do I use to calculate the Effective Cost of Borrowing (IRR in excel) for...

What formula do I use to calculate the Effective Cost of Borrowing (IRR in excel) for the following cash flows.

Years	Cashflows
0	$ (94,000.00)
1	884.91
2	833.33
3	786.50
4	744.30
5	706.57
6	698.12
7	705.77
8	712.64
9	718.74
10	724.03
11	728.49
12	732.11
13	734.87
14	736.76
15	737.74
ECB	IRR=

To calculate ECB, IRR function has to be used using annual payments for cash-flows. However the payments have to be calculated monthly and then annualized (PMT*12)

Expert Solution

To calculate the IRR in excel, go to formulas , financial and select IRR function.

Effective cost of borrowing = 4.95 % 5%

jeff jeffy answered 2 years ago

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