Finding IRR & ERR by using TI-86 calculator Engineering Economics ENGR 4223

1. Finding IRR & ERRby using TI-86 calculatorEngineering EconomicsENGR 4223 By CHIN CHEE KOO 10/14/02

2. Finding IRR using TI-86

3. Using Future Worth Method 7000*(1+i)^3 + 7000*(1+i)^2+ 7000*(1+i) + 12000 = 15000*(1+i)^4 -15000*(1+i)^4 + 7000*(1+i)^3 + 7000*(1+i)^2+ 7000*(1+i) + 12000 = 0 Let X = (1+i) , where X >=1 -15000* X^4 + 7000* X^3 + 7000* X^2+ 7000* X + 12000 = 0

4. -15000* X^4 + 7000* X^3 + 7000* X^2+ 7000* X + 12000 = 0 where X >=1 Press “2nd” and then, “PRGM”

5. -15000* X^4 + 7000* X^3 + 7000* X^2+ 7000* X + 12000 = 0 where X >=1 Enter the Highest Order (power) , then “ENTER”

6. -15000* X^4 + 7000* X^3 + 7000* X^2+ 7000* X + 12000 = 0 where X >=1

7. -15000* X^4 + 7000* X^3 + 7000* X^2+ 7000* X + 12000= 0 where X >=1 Enter values, then press “F5” to solve it!

8. -15000* X^4 + 7000* X^3 + 7000* X^2+ 7000* X + 12000 = 0 where X >=1 Solution Page Only 1.36871736592 is valid answer for X

9. Finding ERR

10. 7000*(1+MARR)^3 + 7000*(1+MARR)^2+ 7000*(1+MARR) + 12000 = 15000*(1+i)^4