Does anyone have an idea how one can calculate IRR interchangeably between annually and monthly without redoing the cashflows to suite. Say if you have already done the annual cashflows for a 25 year period, now one wants to quickly test the irr on a monthly basis while keeping the same parameters.
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IRR - Calcullating IRR interngeably between Annually and Monthly
- Thread starter Mtfombeni
- Start date
Excel Facts
Difference between two dates
Secret function! Use =DATEDIF(A2,B2,"Y")&" years"&=DATEDIF(A2,B2,"YM")&" months"&=DATEDIF(A2,B2,"MD")&" days"
Given the annual IRR in R1, the monthly IRR is =(1+R1)^(1/12) - 1, which is the same as =NOMINAL(R1,12)/12 .
However, I'm not sure what you mean by "test ... on a monthly basis". Bear in mind that the monthly IRR is an average rate of change. It might not match actual monthly percentage changes.
Post a numerical example, if that does not give you the answer that you expected.
However, I'm not sure what you mean by "test ... on a monthly basis". Bear in mind that the monthly IRR is an average rate of change. It might not match actual monthly percentage changes.
Post a numerical example, if that does not give you the answer that you expected.
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