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Updated about 2 years ago,

Account Closed
  • Social Media Lead at BiggerPockets
  • Phoenix, AZ
9
Votes |
40
Posts

Calculating Internal Rate of Return (HELP)

Account Closed
  • Social Media Lead at BiggerPockets
  • Phoenix, AZ
Posted

What is the IRR of an investment that costs $75,000 up front, earns you $22,000 per year for four years, and then generates $115,000 at sale?

This is from the "Real Estate By The Numbers" book by Dave Meyer and J Scott. 

I was able to choose a discount rate % that would make the NPV greater than 0, which I would accept the investment at that point. Though, in the book the answer to the IRR=11.02 and I truly want to understand how they calculated it.

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