You have made an investment today of $3,000 that will pay you $125 per month over the next three years (36 payments) and you will receive your first payment today.What is the effective annual rate of return on this investment?

It shows how to solve this by financial caluculators, but when I tried, I got a different number.

Here is the solution:

Using your calculator...calculate the Periodic rate for an annuity "due"

Given PV = $3,000; N = 36; PMT = $125 solve for I / Y = 2.5416%...then solve for EAR as follows EAR = [(1 + 0.025416 )^12] - 1 = 35.15%.