This is bugging me…assistance someone? I’m trying to figure out the discount rate but something is stumping me. 10 year annuity example PV = -230,166 (don’t forget the negative sign!) PMT = 1,547.36 (monthly) N = 10 x 12 = 120 CPT I/Y which = 4.11% (answer I got was multiplied by 12) 26 year annuity example Input same amounts except 26 x 12 for N = 312 I/Y works out to 6.62%. OK, makes sense since you obviously need a higher rate to pay out for a longer period. But then I try with 15 years so you’d think the rate should be somewhere in between 4.11 and 6.62% right? Well I get 2.62%?? What am I imputting wrong?
You’re 4.1% is actually -4.1% -4.1%<2.6%<6.6%
Oh, thanks!
Just a quick comment - the discount rate for the 10 tear example MUST be negative, because the sum of the payments is less than the present value.