IRR Calculator
Enter a series of cash flows to find the internal rate of return, the discount rate at which the investment's net present value equals zero.
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Enter at least two cash flows with a sign change to see IRR.
Worked example
With these example inputs:
- Cash flows-100,003,000,420,048,010,000
IRR: 23.97%
- Periods4
- Net cash flow (undiscounted)$7,500
Frequently asked questions
What is the internal rate of return?
IRR is the discount rate at which a project's net present value is zero. It is often read as the annualised return the cash flows imply.
When can IRR be calculated?
The cash flows need at least one sign change, typically an outflow followed by inflows. Unusual patterns can produce multiple IRRs or none at all.
What is the internal rate of return in simple terms?
It is the single growth rate earned by a series of cash flows. At that exact rate, the money you put in and take out perfectly balance. A higher IRR means the investment grows your money faster. You usually compare it against the return you need.
How do I enter the cash flows?
List them in order, with the first being the money you pay out. Write that first amount as a negative number to mark the outlay. Then add each amount you receive later, separated by commas. Each value stands for one equal time period.
Why does the first number need to be negative?
An investment starts with money leaving your pocket, which is a cost. Marking it negative tells the tool that cash flowed out first. The later positive numbers are the returns flowing back in. Without that negative start, the rate cannot be found.