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10.11.2008 at 01:25PM PDT, ID: 23806887
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9.3

solving payoff amount x in last period using a IRR using mysql

Asked by derekstattin in PHP and Databases, JavaScript, PHP Scripting Language

Tags:

I want to pick an IRR=r (say 15%), and determine how much would have to be paid in the last period of the cash flow sequence to achieve this IRR.
e.g.
using wikipedia e.g.
0      -100
1      40
2      59
3      55
4      x

Solving the summation equation for x
x = the amount that needs to be paid to reach an internal rate of return of 15%
r = .15
NPV = 0 = -100 + 40/(1+.15)^1 + 59/(1+.15)^2 + 55/(1+.15)^3 + x/(1+.15)^4 for x
0= -100 + 34.78261 + 44.61248 + 36.16339 + x/(1+.15)^4
0 = 15.5585 + x/(1+.15)^4
-15.5585 = x/1.749006
-15.5585*1.749006 = x
-27.2119 = x

(note: in this example the value of x is negative, but in most cases it will be positive)

please see bayparkcapital.com/topiclistE.php for progress to dateStart Free Trial
[+][-]10.11.2008 at 10:07PM PDT, ID: 22696408

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[+][-]10.12.2008 at 03:33AM PDT, ID: 22696935

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[+][-]10.12.2008 at 11:23AM PDT, ID: 22698340

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About this solution

Zones: PHP and Databases, JavaScript, PHP Scripting Language
Tags: php, mysql
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Solution Provided By: mankowitz
Participating Experts: 1
Solution Grade: A
 
 
[+][-]10.12.2008 at 01:10PM PDT, ID: 22698698

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