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How do I calculate the final pmt required to meet a target IRR?



 
 
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  #1  
Old October 9th, 2005, 02:47 AM
Alex
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Default How do I calculate the final pmt required to meet a target IRR?


  #2  
Old October 9th, 2005, 03:22 AM
Vasant Nanavati
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Can you elaborate?

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Vasant


"Alex" wrote in message
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  #3  
Old October 9th, 2005, 03:29 AM
Alex
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An investor will be investing 2,500 in year 1, not taking any return for 5
years, but at the end of year 6 wants a payment so that his IRR upon
receiving that payment will equal 25%. Help!

"Vasant Nanavati" wrote:

Can you elaborate?

--

Vasant


"Alex" wrote in message
...




  #4  
Old October 9th, 2005, 03:43 AM
Alex
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I can use goal seek to determine the number, but what I need is a tool that
will change that answer as I change the variables, e.g. the amount of the
original investment.

"Alex" wrote:

An investor will be investing 2,500 in year 1, not taking any return for 5
years, but at the end of year 6 wants a payment so that his IRR upon
receiving that payment will equal 25%. Help!

"Vasant Nanavati" wrote:

Can you elaborate?

--

Vasant


"Alex" wrote in message
...




  #5  
Old October 9th, 2005, 03:45 AM
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Alex wrote:
An investor will be investing 2,500 in year 1,
not taking any return for 5 years, but at the
end of year 6 wants a payment so that his IRR
upon receiving that payment will equal 25%.


If I understand you correctly, you simply want
the future value (FV) a 6-year investment of
$2500 at 25% per year.

=FV(25%,6,,-2500)

  #6  
Old October 9th, 2005, 03:58 AM
Alex
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Yes, that is exactly what I need. Thank you.

" wrote:

Alex wrote:
An investor will be investing 2,500 in year 1,
not taking any return for 5 years, but at the
end of year 6 wants a payment so that his IRR
upon receiving that payment will equal 25%.


If I understand you correctly, you simply want
the future value (FV) a 6-year investment of
$2500 at 25% per year.

=FV(25%,6,,-2500)


 




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