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55=(3.93/(1+IRR)) + (9.1/(1+IRR)^2) + (6.93+57.75/(1+IRR)^3) How do you calculate for IRR?

Guest Mar 7, 2017
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I assume this is :

 

55=(3.93/(1+IRR)) + (9.1/(1+IRR)^2) + (6.93+57.75)/(1+IRR)^3)

 

Let (1 + IRR) = x      so we have

 

55 = 3.93 / x + 9.1/x^2  +  64.68/x^3       multiply throgh by x^3

 

55x^3 = 3.93x^2 + 9.1x + 64.68     rearrange as

 

55x^3 - 3.93x^2 - 9.1x - 64.68  = 0

 

The easiest way to solve this is with a graph :

 

http://www.wolframalpha.com/input/?i=55x%5E3+-+3.93x%5E2+-+9.1x+-+64.68++%3D+0

 

So  x  =  1.13322

 

And 1 + IRR = x  ...  so...

 

IRR =  x - 1

 

IRR = 1.13322 - 1   =   .13322    =   13.322%

 

 

cool cool cool

CPhill  Mar 7, 2017

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