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felix behler's avatar
felix behler
Copper Contributor
Aug 30, 2018
Solved

sum quotient

Hello, i'm not an expert at excel so my question might seem dumb but I have the following problem: I have one column stating the period (continuous from 1-28)  i have another column stating total ca...
excel
  • Man Fai Chan's avatar
    Man Fai Chan
    Aug 30, 2018

    I was invited by Mr Kim for help. However, I am not so familiar with Financial Mathematics. 

     

    I created a column to create the quotients (C/(1+r)^t), where r is indicated in L1. Changing the value in L1 will give a different sum in L4. So, the user can guess the value of r.

     

    There is a function called "XIRR" which seems to do this type of problem. But, I do not understand the setting. 

Lorenzo Kim's avatar
Lorenzo Kim
Bronze Contributor
Aug 30, 2018

Mr. Behler

please see attached file if this is what you need.

do not test this directly on your file.. try it first in the test sample.

Hope this helps.

thanks 

  • felix behler's avatar
    felix behler
    Copper Contributor
    Aug 30, 2018

    i want to do the following with my numbers:

    7.776/(1+r)^1+7.898/(1+r)^2+8.054/(1+r)^3+…+3.248/(1+r)^28 - 100

    set equal to 0 and solve for r

     

     

    for example i could imagine putting this:

    =(E2/(1+I2)^B2+E3/(1+I2)^B3+E4/(1+I2)^B4 and so on subtract by 100 and then using the solver chaning the 0.2 (which are a random number now)

    but im not sure..

    • felix behler's avatar
      felix behler
      Copper Contributor
      Aug 30, 2018

      what i want to do is:

      (E2/(1+I2)^B2+E3/(1+I2)^B3+E4/(1+I2)^B4+E5/(1+I2)^B5+E6/(1+I2)^B6+E7/(1+I2)^B7+E8/(1+I2)^B8+E9/(1+I2)^B9+E10/(1+I2)^B10+E11/(1+I2)^B11+E12/(1+I2)^B12+E13/(1+I2)^B13+E14/(1+I2)^B14+E15/(1+I2)^B15+E16/(1+I2)^B16+E17/(1+I2)^B17+E18/(1+I2)^B18+E19/(1+I2)^B19+E20/(1+I2)^B20+E21/(1+I2)^B21+E22/(1+I2)^B22+E23/(1+I2)^B23+E24/(1+I2)^B24+E25/(1+I2)^B25+E26/(1+I2)^B26+E27/(1+I2)^B27+E28/(1+I2)^B28+E29/(1+I2)^B29)-100

      set this equal to 0 and replace I2 by the value which gives me 0 for the equation. (whats an easy way to write it?)

      • Lorenzo Kim's avatar
        Lorenzo Kim
        Bronze Contributor
        Aug 30, 2018
        my apologies - this turns out to be very complex for me.....
        solving for I2 is - there could be a circular reference in this..
        maybe other people can solve this..
        good luck
  • felix behler's avatar
    felix behler
    Copper Contributor
    Aug 30, 2018

    Dear Mr. Kim,

    First of all thanks for the reply. However this is not the solution to my problem. Maybe i didn't express it well. What im trying to do is getting the present value of each periods cash flow with an unknown discount rate (C_t/(1+r)^t), add them all together (all the cash flows for each period), subtract it by the initial costs and then solve for the discount rate. In the sheet you send me some numbers got mixed up.

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