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Informative Article | Mathematics | India | Volume 12 Issue 12, December 2023 | Rating: 4.7 / 10
Mathematics of Finance: Internal Rate of Return (IRR)
Merry Mariam Mathews
Abstract: This article abstract discusses the concept of the Internal Rate of Return in finance and provides a detailed explanation of how to calculate it, using practical examples and mathematical analysis. It highlights the importance of IRR in evaluating the profitability of investments and presents step- by-step instructions for determining the IRR. The article also includes two illustrative examples with calculations, demonstrating the application of IRR in real-world scenarios. In the first example, the IRR is calculated for a project with given cash flows, while the second example deals with a different investment scenario. The abstract concludes by emphasizing the importance of understanding IRR and its practical utility in financial decision- making.
Keywords: Internal rate of return, net present value, yield rate
Edition: Volume 12 Issue 12, December 2023
Pages: 863 - 864