IRR calculation help

Expert replies

musicfreak007: Newbie | Next Rank: 10 Posts; Posts: 2; Joined: Tue Nov 22, 2011 3:52 am

by musicfreak007 » Tue Nov 22, 2011 4:16 am

Guys I am trying to get my basics right in maths. please find a simple question below:

X lends Y a sum of INR 100000 at an interest rate of 16.25% (reducing) for a period of 3 years which he expects to be paid back in 36 equal installment. At the same time X takes a deposit of INR 12500 from Y at an interest rate of 8%(reducing) for which Y expects to be paid back in 36 equal installment. The processing fee charged by X is INR 750 (being taken upfront). How much annual IRR is the X making from the whole transaction?

Kindly help me solving this on excel as well.

Many thanks
A

Source: Beat The GMAT — Problem Solving | Tue Nov 22, 2011 4:16 am

user123321: Master | Next Rank: 500 Posts; Posts: 385; Joined: Fri Sep 23, 2011 9:02 pmFollowed by: 6 members; Thanked: 62 times

by user123321 » Tue Nov 22, 2011 6:56 am

musicfreak007 wrote:Guys I am trying to get my basics right in maths. please find a simple question below:

X lends Y a sum of INR 100000 at an interest rate of 16.25% (reducing) for a period of 3 years which he expects to be paid back in 36 equal installment. At the same time X takes a deposit of INR 12500 from Y at an interest rate of 8%(reducing) for which Y expects to be paid back in 36 equal installment. The processing fee charged by X is INR 750 (being taken upfront). How much annual IRR is the X making from the whole transaction?

Kindly help me solving this on excel as well.

Many thanks
A

is it 44,666 INR ??
please provide the choices.

user123321

Just started my preparation

Want to do it right the first time.

chaitanyabhansali: Junior | Next Rank: 30 Posts; Posts: 20; Joined: Sun Apr 17, 2011 7:16 amFollowed by: 1 member

by chaitanyabhansali » Tue Nov 22, 2011 9:25 am

45ooo?
Answer please..!

musicfreak007: Newbie | Next Rank: 10 Posts; Posts: 2; Joined: Tue Nov 22, 2011 3:52 am

by musicfreak007 » Tue Nov 22, 2011 11:37 pm

Can you help me with the calculations you did to arrive to this answer. Sorry I dont have any answer. Would much appreciate if the mentors/ experts out here can throw some light.
Thanks

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