An Investment of $185,575 Is Expected to Generate Returns of $65,000

question 161

Short Answer

An investment of $185,575 is expected to generate returns of $65,000 per year for each of the next 4- years.  What is the investment's internal rate of return?
Below is a table for the present value of $1 at compound interest.
Below is a table for the present value of an annuity of $1 at compound interest.

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Definitions:

Investment Portfolio

An assortment of monetary assets, including shares, bonds, commodities, money, and near-money instruments such as mutual funds and exchange-traded funds (ETFs).

Asset Classes

Categories of assets with similar characteristics and behavior in the marketplace, such as stocks, bonds, real estate, and cash.

Securities

Assets indicating an equity share in a publicly-listed firm (stock), a lending arrangement with a corporation or government (bond), or ownership rights via options.

Agency Problem

A conflict of interest between the principals, such as shareholders, and the agents managing the company, like executives or managers.