MIRR Calculator

Modified internal rate of return with separate finance and reinvestment rates.

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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, a finance rate for the outflows and a reinvestment rate for the inflows. MIRR gives a single rate of return that avoids the unrealistic assumption in IRR that every inflow is reinvested at the IRR itself.

How to use

1
Step 1
Add the cash flows in order, starting with today. Outflows are negative.
2
Step 2
Enter the finance rate, used to discount negative flows.
3
Step 3
Enter the reinvestment rate, earned on positive flows.
4
Step 4
Press Calculate.

How it works

MIRR discounts negative flows back to today at the finance rate and compounds positive flows forward to the end at the reinvestment rate. It then finds the single rate that grows the first amount into the second. Because it uses realistic reinvestment, MIRR is usually below IRR for a profitable project and always has one answer.

MIRR = (FV of inflows at reinvestment rate ÷ PV of outflows at finance rate)^(1 ÷ n) − 1

Worked example

A four-year project

Input
Cash flows −10,000, 3,000, 4,200, 6,800, 4,000; finance 10%; reinvest 12%
Output
MIRR 20.5221%
Walkthrough
The IRR of the same flows is 26.0668%, which assumes inflows are reinvested at 26%. MIRR assumes 12%, so it comes out lower. With a finance and reinvestment rate of 8% on −50,000 followed by four years of 15,000, the MIRR is 7.8278%.

Limitations

  • Result depends on the two rates you choose.
  • Equal-length periods only.

Questions

What is the difference between IRR and MIRR?
IRR implicitly reinvests every inflow at the IRR. MIRR uses a reinvestment rate you set, which is usually more realistic.
Which rate should I use for reinvestment?
The return you could reasonably earn on spare cash, such as your cost of capital or a savings rate.
Why is the MIRR lower than IRR?
Because the reinvestment rate you chose (12%) is lower than the project's IRR (26%).
Can MIRR have more than one answer?
No. Unlike IRR, it returns a single rate.

Features

  • Separate finance and reinvestment rates
  • Single unambiguous answer
  • Runs in your browser

Related resources

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

  • Calculating simple and compound interest

    Khan Academy

    Worked examples to compare with calculator output.

    Watch on YouTube

  • Introduction to bonds

    Khan Academy

    Coupon and yield basics for bond calculators.

    Watch on YouTube

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