IRR Calculator

Internal rate of return that zeroes the NPV of a cash-flow series.

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Educational estimate only — not investment, lending, or financial advice. Confirm figures with statements or a qualified professional before you act.

About this tool

Enter a list of cash flows starting with today's outlay, and the calculator finds the internal rate of return: the per-period rate at which the present value of the inflows equals the outlay.

How to use

1
Step 1
Add the cash flows in order, starting with today. Outflows are negative.
2
Step 2
Leave the starting guess at 10% unless you have a reason to change it.
3
Step 3
Press Calculate to see the IRR.

How it works

IRR is solved numerically as the rate that sets NPV to zero. It needs at least one sign change in the cash flows. When the flows change sign more than once there can be several valid rates, and the tool returns the one nearest your guess and shows a warning. The result is per period, so annual flows give an annual rate.

find r such that Σ CFₜ ÷ (1 + r)^t = 0

Worked example

A project with four inflows

Input
Cash flows −10,000, 3,000, 4,200, 6,800, 4,000
Output
IRR 26.0668%
Walkthrough
At 26.0668% the discounted inflows sum to exactly 10,000, so NPV is zero. A smaller project of −1,000, 300, 420 and 680 has an IRR of 16.3406%.

Limitations

  • Per period, not necessarily per year.
  • Several sign changes can give several rates; the tool warns when this happens.
  • For irregular dates use XIRR.

Questions

What is a good IRR?
Compare it with your required return or cost of capital. If IRR is higher, the project clears the hurdle on those assumptions.
Why do I get a warning about sign changes?
Cash flows that switch between negative and positive more than once can have several IRRs. The tool returns the one nearest your guess and flags it.
Why can't it find an IRR?
With all flows the same sign there is no rate that makes NPV zero.
How is IRR different from ROI?
ROI is the total gain over cost. IRR is a rate per period that accounts for when each flow happens.

Features

  • Multiple-sign-change warning
  • Adjustable starting guess
  • Runs in your browser

Guides

Related resources

Guides and videos from around the web—opens on YouTube or the publisher’s site.

  • Compound interest introduction

    Khan Academy

    Core compounding behind TVM and ICONV tools.

    Watch on YouTube

  • Introduction to interest

    Khan Academy

    Simple vs compound framing for NOM/EFF conversions.

    Watch on YouTube

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