Returns the internal rate of return as a fraction.

Category: | Financial |

The INTRR function returns
the internal rate of return over a specified base period of time for
the set of cash payments c0, c1,..., cn. The time intervals between any two consecutive
payments are assumed to be equal. The argument freq > 0 describes the number of payments
that occur over the specified base period of time. The number of notes
issued from each instance is limited.

The internal rate of
return is the interest rate such that the sequence of payments has
a 0 net present value. (See the NETPV Function.) It is given by

$\begin{array}{c}r=\{\begin{array}{cc}\frac{1}{{x}^{freq}}-1\hfill & freq>0\hfill \\ -lo{g}_{\epsilon}\left(x\right)\hfill & freq=0\hfill \end{array}\hfill \end{array}$

In the case of multiple
roots, one real root is returned and a warning is issued concerning
the non-uniqueness of the returned internal rate of return. Depending
on the value of payments, a root for the equation does not always
exist. In that case, a missing value is returned.

Missing values in the
payments are treated as 0 values. When freq > 0, the computed rate of return is the effective rate over
the specified base period. To compute a quarterly internal rate of
return (the base period is three months) with monthly payments, set freq to 3.

If freq is 0, continuous compounding is assumed
and the base period is the time interval between two consecutive payments.
The computed internal rate of return is the nominal rate of return
over the base period. To compute with continuous compounding and monthly
payments, set freq to 0. The
computed internal rate of return will be a monthly rate.

Copyright © SAS Institute Inc. All rights reserved.