A financial asset will pay you $10,000 at the end of 10 years if you pay premiums of $175 per year at the end of each year for 10 years. What is the IRR of this financial asset?
A) 33.26%
B) 34.98%
C) 35.93%
D) 36.72%

Question

Quizplus · Accepted Answer

The IRR (Internal Rate of Return) is the discount rate that makes the net present value (NPV) of all cash flows from a particular project equal to zero. By calculating the IRR for the given cash flows (-$175 for 10 years and $10,000 at the end of year 10), the IRR is found to be approximately 35.93%.

A Financial Asset Will Pay You $10,000 at the End