Effective Rate of Interest

Can effective rate of interest formula be also applied in case of series of cash flow (regular/irregular) or it can be only used in case of single cash flow only?

Answers (5)

Can you please explain the effective rate calculation of the following: Annual investment 1 lakh For a period of 5 years (1 lakhÃ?5=5 lakh) @ 12% p.a. By using the formula [(1+r)^n-1]Ã?100 I'm getting an absurd answer... Or there is a different formula for series of cash flow?

There is no specific question. Actually i was watching time value of money module today and after future value of annuity concept, this came to my mind... So, I quoted the annuity example in the video for EAIR... I think I was trying to calculate the effective rate after 5 years whereas it is to be calculated annually... so was getting a weird return...