Usha,
This function is used mainly in finance. This can be better explained
by an example.
Let us assume, you are having Rs. 1,00,000/- which you want to invest.
You got two proposals.
1. Fixed deposit at 10% interest for five years.
2. an annuity plan :
end of 1st year you will get 17,000
end of 2nd year you will get 22,000
end of 3rd year you will get 27,000
end of 4th year you will get 32,000
end of 5th year you will get 37,000
In the first case you know the interest rate.
In the second case you have to calculate the interest rate.
So that you can choose what is more benificial.
for this purpose you can use IRR function
Just type your proposed investment and returns in like below
in A1 -100000 Your investment
in B1 17000 first year return
in C1 22000 second year return... and the like D1, E1, F1
Now use IRR function =IRR(A1:F1)
This is only sample example.
Regards,
Kishan Reddy, K
On Sep 9, 1:17 pm, Usha Negi <ushadhvin...@gmail.com> wrote:
> Dear All,
>
> Can you tell me what is IRR (Internal Rate of Return Calculation) in Excel
> and how to use it?
>
> Regards,
> Usha
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