Ispmt, 126 ispmt – Apple iWork '09 User Manual
Page 126
Example 2
Assume you are presented with the opportunity to invest in a partnership. The initial investment
required is $50,000. Because the partnership is still developing its product, an additional $25,000 and
$10,000 must be invested at the end of the first and second years, respectively. In the third year the
partnership expects to be self-funding but not return any cash to investors. In the fourth and fifth
years, investors are projected to receive $10,000 and $30,000, respectively. At the end of the sixth
year, the company expects to sell and investors are projected to receive $100,000.
Using the IRR function, you can determine the expected rate of return on this investment. Based on
the assumptions given, the rate would be 10.24%.
Initial
Deposit
Year 1
Year 2
Year 3
Year 4
Year 5
Sales
proceeds
=IRR(B2:H2)
-50000
-25000
-10000
0
10000
30000
100000
Related Topics
For related functions and additional information, see:
“Choosing Which Time Value of Money Function to Use” on page 348
“Common Arguments Used in Financial Functions” on page 341
“Listing of Financial Functions” on page 96
“Value Types” on page 36
“The Elements of Formulas” on page 15
“Using the Keyboard and Mouse to Create and Edit Formulas” on page 26
“Pasting from Examples in Help” on page 41
ISPMT
The ISPMT function returns the interest portion of a specified loan or annuity payment
based on fixed, periodic payments and a fixed interest rate. This function is provided
for compatibility with tables imported from other spreadsheet applications.
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Chapter 6
Financial Functions