# Internal rate of return

## 1 Answer

$$NPV= -A+\sum_{t=0}^{T} \frac{EZU}{(1+EZF)^t}=-A+EZU(\frac{1-(1+EZF)^{T+1}}{1-(1+EZF)}) $$

\[=-A+\frac{EZU}{EZF}[(1+EZF)^{T+1}-1].\]

Hence

\[\frac{(1+EZF)^{T+1}-1}{EZF}=\frac{(NPV+A)}{EZU}.\]

This equation can not be explicitly solved in terms of $EZF$ and one needs to solve it numerically.

Erdos

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