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XIRR and present value problem

krizziii

New Member
Hi guys,

I have a question regarding the xirr formula compared to ordinary present value calculation. I guess this is a pretty common problem, but i could not find the answer in other threads.

Please see the excel file attached. I cannot understand why there becomes a difference between these two figures - they uses the same set of numbers.

I need the 5,519 to become 5,515 somehow, not the other way around - the cash flow it self i correct.

Best,
Kristoffer
 

Attachments

Hui

Excel Ninja
Staff member
Krizziii

Firstly, Welcome to the Chandoo.org Forums

I am assuming you calculated the value of 11,101.6217 by compounding 5515 at 15% pa
That gives you your value

But that is actually where the error occurs.

The correct calculation for 2020 and 2024 is Value = Prev_Value * (1+0.15)^(366/365)
So the correct value of 2024 should be 11,100.58711...

Now if you apply XIRR to that it returns 15% as XIRR uses the 366 day leap years in its calculations

Your PV calculation is also approximate as it does not allow for these extra 2 days
 
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