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Problem 6-72 Calculating Interest Rates [LO4)] A financial planning service offe

ID: 2817876 • Letter: P

Question

Problem 6-72 Calculating Interest Rates [LO4)] A financial planning service offers a college savings program. The plan calls for you to make six annual payments of $15,500 each, with the first payment occurring today, your child's 12th birthday. Beginning on your child's 18th birthday, the plan will provide $28,000 per year for four years. What return is this investment offering? (Do not round intermediate calculations. Enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.) Return /0

Explanation / Answer

Return of this invetsment offering 3.76%

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A B C D E F G H I J 1 Year 12 13 14 15 16 17 18 19 20 21 2 Cash Flow -15500 -15500 -15500 -15500 -15500 -15500 28000 28000 28000 28000 Rate using IRR 3.76% Using Excel Formula=IRR(A2:J2)