IRR Calculator

1. Type your cash flows in time order, starting with period 0. The first value is usually the negative up-front cost, such as -50000.
2. Pick the period length (year, quarter or month) and enter your discount or hurdle rate. Add a separate reinvestment rate only if you want MIRR to use a different rate.
3. Read the IRR, the verdict against your hurdle rate, and the NPV, MIRR, payback and sign-change check underneath.

Each output answers a different question:

The internal rate of return (IRR) is the discount rate that sets the present value of cash inflows equal to the present value of cash outflows. At that rate the net present value is exactly zero, so IRR works as the break-even return built into a project.

Business owners, property investors and finance students use IRR to rank projects that have different sizes and timings. It suits any investment with an up-front cost and later returns, such as equipment, a rental unit or a small business. IRR is not a guaranteed yearly profit, not an interest rate on a bank account, and not a measure of risk. It also does not tell you how much money a project adds; that is the job of net present value.

The calculator searches for every rate that makes the NPV equation equal zero, then reports those rates as yearly percentages.

1. It evaluates the NPV at 2,400 test rates spread from -99.9% to 1,000% per period.
2. Wherever the NPV changes sign between two test rates, it narrows the gap by bisection, which always converges, and then refines the answer with Newton steps.
3. It converts each per-period root to a yearly rate with (1 + r)^k - 1, where k is 4 for quarters and 12 for months.
4. It computes NPV at your rate, MIRR, the undiscounted total and the payback period from the same list.

No algebra formula solves IRR directly once there are more than a few periods, so every tool uses a search. This one reports all roots it finds instead of stopping at the first. For the underlying math of reading a rate from cash flows, see the IRR explainer.

A food truck costs 50,000 today and is expected to return 15,000, 20,000, 25,000, 30,000 and 35,000 over the next five years. The owner requires 10 percent a year.

Meaning: the project clears the 10 percent hurdle by about 24 points, and its NPV is strongly positive. The MIRR of 24.04 percent is lower than the IRR because it assumes the yearly cash is reinvested at 10 percent, not at 34 percent. The earlier version of this page gave 21.2 percent for this same example, which was wrong.

IRR reacts to the timing of cash as much as to its size, so small edits can move it a lot.

Timing of Inflows

Moving the same cash earlier raises IRR. Swapping the food truck order to 35,000 first and 15,000 last lifts the IRR because big returns arrive before discounting bites.

Size of the Up-Front Cost

A larger initial outlay with the same inflows lowers IRR. IRR ignores scale, so a small project can show a higher IRR than a much larger, more valuable one.

Sign Changes in the Cash Flows

A project with money out, then in, then out again (for example a clean-up cost at the end) can have two IRRs or none. The calculator counts the sign changes and warns you.

Period Length

Monthly cash flows give a monthly IRR. The tool annualizes it by compounding, so a 1% monthly IRR shows as 12.68% a year, not 12%.

Terminal Value

For a property or business you plan to sell, the sale price in the last period often drives most of the IRR. Test a lower sale price to see how sensitive the result is.

These four measures use the same cash flows but answer different questions, so analysts usually read them together.

When IRR and NPV rank two competing projects differently, NPV is the safer guide because it measures value added in money terms. OpenStax lists ignoring differences in scale as a key weakness of IRR.

Screening a Single Project

Compare the IRR with your cost of capital or the return you could earn elsewhere. An IRR above that hurdle means a positive NPV at the same rate.

Comparing Offers with Different Timing

IRR puts a 3-year and a 7-year cash stream on the same yearly scale. Pair it with NPV before choosing between them.

Checking a Quoted Return

Sellers of equipment, franchises or rental property sometimes quote a return. Enter their own cash-flow table to confirm the figure. For a simple start-and-end growth rate with no cash in between, the rule of 72 calculator gives a quick doubling-time check.

1. Leaving Out a Cash Flow

Missing a repair, tax payment or sale price changes the answer. Every period needs a value, even if it is 0.

2. Entering the Cost as a Positive Number

Money you pay out must be negative. With all positive values, no IRR exists and the tool shows an error.

3. Mixing Period Lengths

Entering monthly cash flows with the period set to year makes the IRR about twelve times too high in practice. Match the toggle to your data.

4. Trusting One IRR When There Are Two

With more than one sign change, the IRR is not unique. Use NPV at your rate and MIRR instead.

5. Ranking Projects of Different Size by IRR

A 60% IRR on 1,000 adds less value than a 20% IRR on 100,000. Compare NPV for mutually exclusive choices.

6. Treating IRR as Guaranteed

IRR is only as reliable as the forecast behind it. Test lower inflows and later timing.

The solver is accurate to far more decimals than it displays, so the limits come from the inputs and from IRR as a measure.

A good IRR is one above your own hurdle rate, which is your cost of capital or the return you could earn elsewhere at similar risk. There is no single universal number, so enter your hurdle rate and the verdict compares the two.

Yes. A negative IRR means the cash you get back is less than the cash you put in, even before discounting. The calculator reports negative IRRs down to -99.9% a year.

Two IRRs appear when the cash flows switch sign more than once, such as a cost, then income, then a large clean-up cost. The OpenStax example -350, 950, -620 has IRRs of 9.18% and 62.25%. In that case judge the project by NPV and MIRR.

The NPV never crosses zero between -99.9% and 1,000% per period. That happens when inflows are far too small or far too large compared with outflows. NPV at your discount rate still tells you whether the project adds value.

IRR assumes every inflow is reinvested at the IRR itself. MIRR lets you set a realistic reinvestment rate and a finance rate for outflows, so it usually gives a lower, more conservative figure when the IRR is high.

No. ROI is a simple total gain divided by cost, with no allowance for when the cash arrives. IRR is a yearly rate that accounts for timing. A 150% total ROI over five years can match an IRR anywhere from about 20% to over 30%, depending on the timing.

Enter one value per month and set the period toggle to Month. The calculator finds the monthly IRR and compounds it to a yearly rate with (1 + r)^12 - 1.

Only by trial and error for most real cash flows. You test a rate, compute the NPV, and adjust until the NPV is close to zero. The calculator does the same thing automatically with a bisection search.

Spreadsheet IRR functions return one root near a starting guess, so with several sign changes they may show a different root. Check that both tools use the same cash flows and equal period lengths.

No. The calculation runs in your browser and nothing is sent to our servers. Anything you choose to Save stays in this browser only.

• Internal Rate of Return (IRR) Method, Principles of Finance section 16.3 (OpenStax, Rice University).
• Net Present Value (NPV) Method, Principles of Finance section 16.2 (OpenStax, Rice University).
• Internal Rate of Return (IRR) (Corporate Finance Institute).
• Modified Internal Rate of Return (MIRR) (Corporate Finance Institute).