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October 3rd, 2013, 06:33 AM  #1 
Newbie Joined: Oct 2013 Posts: 2 Thanks: 0  IRR Problem
Hello! I have no significant background in math and I just started studying finance and now our professor assigned us our first problems. Mine is the one dealing with the internal rate of return (IRR). ''John takes a loan of 100 euros which he pays back after 45 days with a sum of 131. Count the IRR for the loan for a year.'' I have no doubt that for the people on this forum this problem must seem ridiculously easy. Thanks in advance! 
October 3rd, 2013, 04:09 PM  #2 
Global Moderator Joined: Nov 2006 From: UTC 5 Posts: 16,046 Thanks: 938 Math Focus: Number theory, computational mathematics, combinatorics, FOM, symbolic logic, TCS, algorithms  Re: IRR Problem
Do you know the definition of IRR?

October 4th, 2013, 05:34 AM  #3 
Newbie Joined: Oct 2013 Posts: 2 Thanks: 0  Re: IRR Problem
Yeah and I think I've worked out a solution. 1,31^8  1 = 767%.

October 4th, 2013, 09:40 AM  #4  
Math Team Joined: Oct 2011 From: Ottawa Ontario, Canada Posts: 14,412 Thanks: 1024  Re: IRR Problem Quote:
Becomes same as: calculate future value of $100 over 8 years, at annual rate of 31%. 100(1.31^ = 867 (rounded)  