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Assuming an initial investment of $2,500.
The IRR assuming all cash flows occur at the end of each period is:- 37.2471%
Cash flows Year
(2,500.000) 0
1,000.000 1
1,000.000 2
1,500.000 3
1,250.000 4
1,500.000 5
Use IRR function in Excel or trial and error method
IRR = 37.2471%.
The definition of investment is an asset that is purchased or invested to build wealth and save money from hard-earned income or capital appreciation. The importance of investment is primarily to gain an additional source of income or to make a profit from the investment over a period of time.
Investing is an effective way to put money to good use and potentially build wealth. With smart investments, money can outperform inflation and increase in value. The huge growth potential of investments is largely due to the power of compound interest and the risk/return trade-off.
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