download.fan

IRR Calculator

Calculate the internal rate of return (IRR) of a series of cash flows, with annualized IRR for monthly or quarterly periods. Free IRR calculator.

Internal rate of return
16.341%
Net cash flow
4,000.00
Money invested
10,000.00
Money returned
14,000.00

The rate an investment earns

The internal rate of return is the discount rate at which an investment's cash flows have a net present value of zero: the yearly return it effectively earns. Enter the money you put in as negative numbers and the money you get back as positive ones, one per period. Invest $10,000 and get back $3,000, $4,200 and $6,800 over three years, and the IRR is 16.34%. Compare it with your required return: a project is worth it if its IRR is higher.

How to use it

  1. 1

    Enter the cash flows

    Start with the investment as a negative number.

  2. 2

    Set the period

    Whether each cash flow is a year, a quarter or a month.

  3. 3

    Read the IRR

    IRR, annualized IRR and the totals.

Frequently asked questions

How is IRR calculated?

It's the rate r where the sum of each cash flow ÷ (1 + r)^t equals zero. It's found by trial, as in Excel's IRR function.

What is a good IRR?

One above your cost of capital or the return you could earn elsewhere with similar risk.

IRR vs XIRR?

IRR assumes equal periods. XIRR uses exact dates for irregular cash flows.

Why is there no IRR?

IRR needs at least one negative and one positive cash flow. Some unusual cash flows have more than one IRR or none.

Finance calculators

Related tools