Yes, I need help in answering this question. My answer is 6.46%, however, the on
ID: 2757771 • Letter: Y
Question
Yes, I need help in answering this question. My answer is 6.46%, however, the online assignment says its wrong. How do you solve this question? Here is the question: On January 1, 1980, Julie received an annuity-certain. The annuity promised to pay $200 on each September 30th through 1997 and $300 on each December 31st through 1997. If the value of the annuity on January 1, 1980 was calculated to be $5,100, what annual effective rate of interest was used? (Round your answer to two decimal places.)
Explanation / Answer
Make cash flows starting Jan 1, 1980 to 30 sep 1980 to dec 31 1980......dec31, 1997
Jan 1 1980 -5100
Sep 30 1980 200
Dec 31 1980 300
Like this there will be 37 dates with 37 cashflows.
Use XIRR in excel XIRR (all dates, all cash flows) = 0.068977 =6.90%
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