-5
$\begingroup$

Everything I have read about XIRR (e.g., as calculated in Excel) says that there is no closed-form equation and it must be calculated by iterated approximation.

Could someone give a brief mathematical explanation of why there is no closed-form solution?

Improve this question
$\endgroup$

1 Answer 1

Reset to default
3
$\begingroup$

The internal rate of return is simply the rate at which the net present value is zero. So solve for $r$ in

$$ \sum{\frac{C_n}{(1+r)^n}} = 0 $$

There is no closed-form solution to this.

Improve this answer
$\endgroup$
1
  • $\begingroup$ It would be good to get a mathematical explanation of why there is no closed-form solution, but OK $\endgroup$
    – Joshua Fox
    Oct 9, 2018 at 8:06

Your Answer

By clicking “Post Your Answer”, you agree to our terms of service and acknowledge that you have read and understand our privacy policy and code of conduct.

Not the answer you're looking for? Browse other questions tagged or ask your own question.