Payback Period Calculator
Divide an initial investment by its annual cash flow to find the payback period, the number of years it takes to recover what you put in.
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- No sign-up
Enter the investment and annual cash flow to see the payback period.
Worked example
With these example inputs:
- Initial investment$50,000
- Annual cash flow$12,500
Payback period (years): 3.74
- Total growth5.0%
Frequently asked questions
What is the payback period?
It is how long an investment takes to repay its initial cost from the cash it generates. A shorter payback period is generally seen as less risky.
What does the payback period ignore?
It does not account for the time value of money or any cash flows after the break-even point, so pair it with measures like net present value.