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Internal Rate of Return
 

The IRR - the net present value approaches zero






Computations:
Summary:
Net Yields:138283  
Installment Credits:84438  
Net Present Values:73869  
Savings Plans:24691  
Pension by lump sum payment:744  
Repayment Plan:686  
Early repayment charge:98  
Performance of the system
Computation of the internal rate of return(IRR)

The fundamental calculation of interest

On the previous page I have tried to explain how the net present value (NPV) of a sequence of payments is calculated from a comparison net yield and the dates of the payments.

To compute the yield of a security we have to do many calculations of the net present value. We thereby have to find that comparison yield where the NPV of the security is zero. This is the net yield of the security.

The formula of the net present value was:
                N
NBW(B, t, r) = Sum B[i]/(1+r)^t[i]
               i=0

                       
The NPV should become zero. Unfortunately one cannot solve and compute this equation easily after r. One must start with a value of r and change it in such a way, that the NPV approaches zero. Repeating a calculation many times to find a maximum or minimum is called iteration or a iterative procedure. With this procedure one can receive the net yield from payment sequences that follows no rules. The net yield is a very good measure for the success of investments. Naturally, this method has also its limitations.

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Encyclopedia
  Analysis - Internal Rate of Return (IRR)
  Internal rate of return (IRR)
  Return on Investment (ROI)






Hintergründe der Effektivzinsberechnung
Die Hintergründe der Effektivzinsberechnung für Ratenkredite soll in recht kompakter Form vorgestellt werden.
Gibt es einen Effektivzins?
Der Autor diskutiert zwei Methoden der Effektivverzinsung von Kreditgeschäften. An den unterschiedlichen Ergebnissen wird deutlich, daß es einen eindeutigen, "objektiven" Effektivzins nicht gibt.
Bewertung von Zahlungsströmen
Dr. Alex Weissensteiner, Institut für betriebliche Finanzwirtschaft, Universität Innsbruck
Renditeberechnungs-Methoden
Die Renditen von Kapitalanlagen im Bereich von Geschlossenen Fonds wird nach unterschiedlichen Berechnungsmethoden ermittelt. Im Steuersparbereich gibt es 3 gängige Renditeberechnungen
wikipedia.org - Rendite
Der Begriff Rendite (Synonym Profitrate, Ertragsrate, Kapitalverzinsung, Rücklaufquote, Verzinsungssatz - engl. return oder rate of return) ist ein Fachbegriff der Finanzmärkte.



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