You want to send your grandchild to a prestigious university. You heard that a college education will cost $500,000 in 18 years. If you invest $10,000 at the end of each year, what IRR will you need in order to reach your goal of $500,000?
A) 9.07%
B) 12.25%
C) 10.92%
D) 13.35%

Question

Quizplus · Accepted Answer

The correct Internal Rate of Return (IRR) needed to reach the goal of $500,000 by investing $10,000 at the end of each year for 18 years is approximately 10.92%. This is calculated using the future value of an annuity formula or a financial calculator/Excel to solve for the IRR that meets the future value goal given the annual investment and time period.

You Want to Send Your Grandchild to a Prestigious University