Internal Rate of Return (IRR) Calculator

Find the internal rate of return on an investment from its cash flows, with NPV and payback period.

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Money going out today, as a positive number.
Your required return or cost of capital.
Cash Flows (End of Each Year)
Leave later years blank. Use a minus sign for years with net outflows.
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Fractions and decimals both work.
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IRR
NPV
IRR
Profitability index
Payback period
Discounted payback
Total cash returned
Decision at Your Rate

Projects

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How to Calculate IRR

The internal rate of return is the discount rate at which the cash flows exactly repay the investment (NPV is zero). If the IRR is higher than your required return, the investment clears the bar. There is no closed-form formula, so it is found by trial, the same way Excel’s IRR function does it.

NPV = −investment + Σ CFₜ ÷ (1 + r)t
IRR = the rate r that makes NPV = 0
Payback = years until cumulative cash flow turns positive (discounted payback uses discounted flows)

Worked Example

Tips

NPV is the most reliable test when comparing projects; IRR can be misleading when cash flows change sign more than once or projects differ in size. Payback ignores everything after the investment is recovered, so use it as a risk check rather than the decision rule. These match Excel's NPV (applied to years 1 onward, minus the investment) and IRR functions.