IRR Function (formula) convert to annual if monthly data

  • Thread starter Thread starter Troy
  • Start date Start date
T

Troy

If the cashflows are monthly....it appears some people are
converting this to an annual amount by multipling by 12.

If this is correct then why does the IRR formula *12 (12
months in an annual period) not equal the same result as
simple interest (annual)?

Is there a formula definition for the IRR function and how
do you convert this to an annualized IRR if cash-flows are
monthly?
 
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