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Doris Wade purchased a condominium for $50,000 in 1982. Her down payment was $12,000. She financed the remaining amount as a $38,000 35-year mortgage at 8%, compounded monthly. Her monthly payments are $190. It is now 2007 (25 years later) and Doris has sold the condominium for $100,000, immediately after making her 300th payment on the unit. Find her effective annual internal rate of return on this investment. Choose the closest answer below. A. OB. O c. D. 2.8% 8.7% 5.9% 1.4%

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Answer #1

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VERY GOOD SUM FROM ENGINEERING ECONOMICS BY SULLIVAN BOOK

Home nert Page Layout Formulas Data Review View dd-Ins Cut Σ AutoSum ー E ゴWrap Text General ta copy ▼ B า 프 . Ej-., Δ. : r_一 逻锂函Merge & Center. $, % , 弼,8 Paste Conditional Format CeInsert Delete Format Formatting, as Table w styles. ▼ ㆆ ▼ Sort &Find & 2 ClearFe Select Edting Format Painter Clipboard PO161 PJ Font Alignment Number Styles Cells Formula Bar PK PL PM PN PO PR PS PT PU 145 146 147 148 149 150 151 152 153 154 155 156 157 158 159 160 161 162 163 11 1 トーCALCULATOR ( LOAN OPTIONS | pv, fv, annuity 1 CAP STRU VALUE WE HAVE TO CALCULATE IRR HERE RATE MONTHLY RATE DOWN PAYMENT PMT YEARS LEFT NO OF INSTALMENTS UNPAID SALE VALUE 8% 0.6666667% 12000 190 10 120 100000 LOAN BALANCE 15660.08 [EXCEL PV(PO148,PO152,-PO150)] INSTALMENTS PAID MONTHLY IRR = ANNULIASED IRR 300 0.111048% [EXCEL-RATE(PO157,-P0150,-PO149,PO153-PO155)) 1.34% (1 +0.11105%/12)^12-1 FORMULA : (1+r/m)^m-1 NEAREST ANSWER: D : 1.4% BOX DILUTION. DOLLAR COST AVG MORTGAGE EXPO Sheet. Sheet2. Shdi rences: x261 23-01-2019

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