Answer: 12%
Explanation:
The Internal Rate of return would be the discount rate that equates the NPV to 0.
Using Excel, you can calculate it by using the =IRR function and then imputing the table values as shown in the attachment.
The IRR will be 12%.
To confirm this;
Savings is constant so is an annuity.
Present Value of savings = 5,000 ( PVIFA 12%, 15 years)
= 5,000 * 6.811
= $34,055
NPV = Present Value of Savings - Investment
= 34,055 - 34,055
= $0
IRR = 12%
