IRR and Effective Interest Rate

[Dosani]

Can you specify the differences between "Internal Rate of Return" and "Effective Interest Rate"?

 

[Becky]

Is this a study question?

 

[Dosani]

No. Actually I am working in an Organisation where we have borrowed a loan and I am working on plotting its amortisation schedule.

 

[Steve-LevelUp]

In my view, an Internal Rate of Return is used to assess the value of an investment and the estimated return that the investment would generate. The Effective Interest rate is the overall effective rate on a loan. I think what you are looking for is a method to distribute the interest rate expense over the term of the loan.