IRR Calculator
Enter cash flows, starting with the initial outlay, to find the internal rate of return.
What this tool does
The internal rate of return is the discount rate at which the net present value of a series of cash flows is zero. For −1,000 followed by 500 for three periods, IRR is 23.38% per period. Enter your cash flows above, with the initial outlay as a negative number first.
Searches for the rate at which the discounted cash flows sum to zero.
Reports the IRR per period with totals in and out.
How to use it
- Enter the cash flows one per line, the initial outlay first as a negative number.
- Add each later cash flow in order.
- Read the IRR per period.
- Compare it with your required return.
Why use this calculator
Finds the internal rate of return for any series of cash flows, including uneven ones, by solving for the rate where NPV is zero. IRR expresses an investment's return as a single percentage, which is easier to compare against a required return or another opportunity than a pile of cash flows.
Why we built it
We built the IRR calculator to find the internal rate of return for any series of cash flows, with a clear message when none exists. Use it beside the NPV calculator, and compare with the steady rate from the CAGR calculator.
Related tools worth a look: the ROI Calculator.
Who this tool is for
- Business owners and analysts appraising projects
- Property investors with uneven cash flows
- Finance students
When to use it
- Comparing a project's return with a target.
- Evaluating a property or business investment with uneven cash flows.
- Cross-checking an NPV result.
- Finance coursework.
How it works
IRR is the rate r that solves Σ cash flow(t) ÷ (1 + r)^t = 0 over all periods including the initial outlay at t = 0. There is no closed form, so the calculator searches numerically.
Example: −1,000, then 500, 500, 500. At 23.38% the discounted inflows sum to 1,000, so IRR = 23.38% per period.
IRR can be misleading when cash flows change sign more than once (there may be several rates), or when comparing projects of different size or length. Use it alongside NPV.
A worked example
These are the values the calculator opens with, so you can see exactly what it does with them. Change any value on the page and the result updates; the figures below come from the same calculation.
| Input | Value |
|---|---|
| Currency symbol | $ (dollar) |
| Cash flows, one per line, starting with the initial outlay as a negative number | -1000 / 500 / 500 / 500 |
With those inputs, the calculator returns:
- Internal rate of return: 23.38%
- Periods: 3
- Total cash in: 1,500.00
- Total cash out: 1,000.00
- Net total: 500.00
What you give it, and what you get back
| Item | Details |
|---|---|
| Cash flows | One per line; the first is usually the initial outlay and negative. |
| Output | IRR per period, number of periods, total cash in and out. |
Issues you may run into
| What you see | Why it happens | What to do |
|---|---|---|
| "Needs a negative and a positive cash flow" | IRR does not exist without both an outlay and a return. | Add the initial outlay as a negative number. |
| No rate found | The flows have no rate in the searched range. | Check signs and magnitudes. |
| IRR is per period | Monthly flows give a monthly IRR. | Annualise it: (1 + r)^12 − 1. |
Assumptions and limitations
- Assumes cash flows are reinvested at the IRR itself.
- May be ambiguous with several sign changes.
- Periods are equally spaced.
Frequently asked questions
What is IRR?
The internal rate of return: the discount rate at which a project's net present value is zero.
What is a good IRR?
One above your required return or cost of capital. What is good depends on the risk and the alternatives.
Is IRR per year?
It is per period. If your cash flows are yearly, it is a yearly rate.
How is IRR different from ROI?
ROI is the total gain over cost, ignoring timing. IRR accounts for when the cash flows happen.
Why can IRR be misleading?
With alternating signs there can be several solutions, and IRR ignores project size.
Is my information sent anywhere?
No. The calculation runs in your browser and your figures never leave the page.
Sources and accuracy
The internal rate of return is the discount rate that sets the net present value of a cash flow series to zero, the standard capital budgeting definition. Cash flows are discounted on the standard end-of-period convention.
Figures last checked against the source on . Standards and rates can change — if you are relying on this for something that matters, confirm against the source above. Think a figure is wrong or out of date? Send a correction.