IRR Calculator
Enter the money you put in and the cash flows it returns each year; the calculator finds the discount rate at which the investment's net present value is exactly zero — its internal rate of return.
TheCalculators — IRR Calculator
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Internal Rate of Return
12.45%
NPV = 0 at this rate over 3 years
- Initial Investment
- $50,000
- Total Cash Inflows
- $80,000
- Total Cash Outflows
- $60,000
- Net Profit
- $20,000.00
- NPV at 10% hurdle
- $3,268
- IRR
- 12.45%
Cash flows by year
Cash flow table
How IRR is found
- 1NPV equationNPV(r) = −Initial + Σ CFₜ / (1+r)^t = 0
- 2Search rangeBisection between −90% and +1000% until NPV crosses zero
- 3Result12.45%
- 4Decision ruleIRR exceeds a 10% hurdle — attractive
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Formula
NPV(r) = −I₀ + Σₜ CFₜ/(1+r)^t = 0 → solve for r (the IRR)
Pro tips
- • IRR is annualized: use yearly cash flows, or convert other frequencies first.
- • When later cash flows are negative, multiple IRRs can exist — check NPV at your hurdle rate too.
FAQ
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