A financial asset will pay you $50,000 at the end of 20 years if you pay premiums of $975 per year at the end of each year for 20 years. What is the IRR of this financial asset?
A) 8.64 percent
B) 9.02 percent
C) 10.51 percent
D) 11.29 percent

Question

Quizplus · Accepted Answer

The IRR is the discount rate that makes the net present value (NPV) of the cash flows from the investment equal to zero. By calculating the IRR for the given cash flows, it is found to be approximately 9.02 percent.

A Financial Asset Will Pay You $50,000 at the End