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What is the internal rate of return compounded annually

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Question - John is considering the purchase of a lot. He can buy the lot today and expects the price to rise to $15,400 at the end of 10 years. He believes that he should earn an investment yield of 8 percent compounded annually on his investment. The asking price for the lot is $8,000.

Required -

a. What is the internal rate of return compounded annually on the investment if John purchases the property for $8,000 and is able to sell it 10 years later for $15,400?

b. Should he buy the lot?

Reference no: EM133139489

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