Calculators
IRR Calculator
Calculate the internal rate of return, modified IRR and payback period for an investment with yearly cash flows.
- Runs in your browser
- Nothing uploaded
The tool
Enter your numbers below. Results update as you type, and nothing leaves your browser.
Everything you enter stays on your own machine. Nothing is sent to us or to anyone else, which you can confirm in your browser network tab.
What people use it for
- Comparing investment opportunities
- Private equity and property appraisals
- Capital budgeting
- Checking a deal's headline return
About this tool
What the IRR Calculator does
The internal rate of return (IRR) is the discount rate at which an investment’s net present value equals zero: the annual return the cash flows imply. The modified IRR (MIRR) assumes positive cash flows are reinvested at a realistic rate, which often gives a more conservative answer.
Formula
- IRR is the rate r where Σ cash flow ÷ (1 + r)^t = 0
- MIRR = (future value of inflows at reinvestment rate ÷ present value of outflows at finance rate)^(1/n) − 1
Worked example
Using the starting values in the calculator above:
| Input | Value |
|---|---|
| Initial investment | $100,000 |
| Cash flows by year | 5 entries |
| Reinvestment rate for MIRR | 8% |
| Finance rate for MIRR | 6% |
| Result | Value |
|---|---|
| Internal rate of return | 18.59% |
| Modified IRR | 13.57% |
| Payback period | 2.9 years |
| Net cash over the life | $60,000 |
How to read the result
IRR assumes interim cash flows are reinvested at the IRR itself, which can be unrealistic for high-IRR projects. MIRR corrects this.
If cash flows change sign more than once, IRR can have several answers. Use NPV in those cases.
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Questions
Questions about this tool
The things clients actually want to know — costs, timelines, ownership and what happens after launch.
The annual rate of return at which the net present value of all cash flows equals zero.
One above your cost of capital or required return for the level of risk.
MIRR assumes reinvestment at a rate you choose rather than at the IRR, which is usually more realistic.
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