4. 150000
53
150000
54
150000
55
150000
56
150000
57
150000
58
150000
59
150000
60
150000
IRR
15%
Computation of inflation rate between 1939 and 1957 i.e. for 18 years
= (Ending value/ Beginning value)^(1/n) -1
= (1,000,000/80,805.12)^(1/18) -1
=12.375^(1/18) -1
= 1.15 -1
= 0.15 = 15%
The rate of return during the period of 60 years is 15% and the inflation rate between 1939 and
1957 is 15%.
I have computed IRR using excel formula. Please post as comments for any clarifications.
Year
Cash flow
0
-1000000
1
150000
2
150000
12. = 0.15 = 15%
The rate of return during the period of 60 years is 15% and the inflation rate between 1939 and
1957 is 15%.
I have computed IRR using excel formula. Please post as comments for any clarifications.
Year
Cash flow
0
-1000000
1
150000
2
150000
3
150000
4
150000
5
150000
6
150000
7
150000
8
150000
9
150000
10
150000
11
150000
12
150000
13
150000
14
150000