IRR Calculator
Find the discount rate that makes the net present value of your investment's cash flows equal to zero.
Example
Invest $10,000 today, then receive $3,000, $4,200, and $6,800 over the next three years.
The IRR is the rate r where 10,000 = 3,000/(1+r) + 4,200/(1+r)² + 6,800/(1+r)³. Solving gives IRR ≈ 16.34%, the annual return that sets net present value to zero.
How it works
Enter the initial investment (a positive number, treated as a period-0 outflow) and one cash flow per line for each following period. The tool solves NPV = 0 for the rate using a bisection method and reports the annual IRR.
Good to know
This IRR Calculator finds the annualized internal rate of return for a project or investment by solving for the discount rate that drives net present value to zero. You enter an upfront investment plus a list of cash flows (one per period), and the tool reports the periodic rate, the annualized IRR, the net cash flow, and the residual NPV at the solved rate so you can confirm the answer is genuinely balanced. It is built for anyone comparing the time-weighted profitability of options that pay out unevenly: rental properties, equipment purchases, private deals, small-business projects, or any cash-flow stream where timing matters as much as totals.
Reach for it when a simple total-return or ROI number hides the timing of money. Two deals can return the same total dollars, but the one that pays you back sooner has a higher IRR because earlier cash can be reinvested. Set the period selector to Yearly when each line is one year, or Monthly when each line is one month; in monthly mode the tool compounds the periodic rate over 12 months to give a comparable annual figure.
Read the headline percentage as the break-even compound return your cash flows imply. A useful sanity check is the "NPV at IRR" stat: it should sit at essentially zero, confirming the rate truly balances inflows against your initial outlay. To judge whether a result is good, compare the IRR against your own hurdle rate or the return of a safe alternative, rather than against an absolute benchmark.
- Enter the initial investment as a positive number; the tool treats it as a period-0 outflow automatically, so do not add a minus sign.
- List cash flows in chronological order, one per line, and leave gaps as a line of 0 for periods with no payment, since position determines the period.
One caveat: IRR can be unreliable when cash flows switch between negative and positive more than once, because such streams can have multiple mathematically valid rates. It also silently assumes you can reinvest interim cash at the IRR itself, which is often optimistic, so treat a high IRR as one input among several rather than a final verdict.
Frequently asked questions
Why does it say "No IRR" for my numbers?
IRR only exists when cash flows change sign at least once — typically a negative initial investment followed by positive returns. If every value is positive (or every value negative), or the rate falls outside the solvable range, no IRR can be found. Make sure your initial investment is entered and at least one cash flow is positive.
How is IRR different from a simple total return?
Total return just sums the cash you get versus what you put in, ignoring timing. IRR accounts for the time value of money: a dollar received in year one is worth more than the same dollar in year three. IRR finds the single annual rate that discounts all future cash flows back to exactly your initial outlay.
Is my data uploaded anywhere?
No — this calculator runs entirely in your browser; nothing is uploaded.
Is this financial advice?
No. These are educational estimates — consult a qualified financial professional before making decisions.
People also ask
What is a good IRR for an investment?
There is no universal threshold; an IRR is considered good when it exceeds your required rate of return or the yield of a comparable lower-risk alternative. Many investors compare IRR against their cost of capital or a personal hurdle rate to decide whether a deal clears the bar.
What is the difference between IRR and ROI?
ROI measures total gain relative to cost as a single lump figure and ignores when the money arrives. IRR is an annualized rate that accounts for the timing of every cash flow, so it can rank projects that pay out on different schedules more fairly.
Can IRR be negative?
Yes. A negative IRR means the cash you receive back, in present-value terms, is less than what you invested, so the stream loses value at any positive discount rate. This calculator will report a negative rate when the cash flows justify it.
Why can an investment have more than one IRR?
When cash flows change sign more than once (for example, outflow, inflow, then another large outflow), the underlying equation can have multiple roots, each a valid mathematical IRR. In those cases IRR becomes ambiguous and analysts often rely on NPV or modified IRR instead.
What is the difference between IRR and NPV?
NPV gives a dollar amount of value created at a chosen discount rate, while IRR gives the single rate at which that NPV equals zero. IRR tells you the implied return; NPV tells you how much absolute value a project adds at your specific required rate.
How do I calculate IRR for monthly cash flows?
Enter one cash flow per month and set the period to Monthly so the tool solves for a monthly periodic rate, then compounds it over 12 months into an annual figure. Mixing yearly and monthly entries in one list will distort the result, so keep all lines on the same interval.
What does it mean when NPV at IRR is zero?
It confirms the solved rate is correct: at the IRR, the present value of all future cash flows exactly equals the initial investment, so the discounted gains and the outlay cancel out. A tiny non-zero residual is just rounding from the numerical solver.
Does IRR account for reinvested cash flows?
Standard IRR implicitly assumes interim cash flows are reinvested at the IRR itself, which can overstate returns when that rate is high. The modified internal rate of return (MIRR) addresses this by letting you assume a separate, often more realistic, reinvestment rate.
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