IRR Calculator
Find the internal rate of return — the discount rate that makes NPV zero.
Please note: A modelling tool, not investment advice. IRR assumes interim cash flows are reinvested at the same rate, which rarely holds, and a series that changes sign more than once can have several valid answers.
What the IRR Calculator does
The internal rate of return is the discount rate at which a project exactly breaks even in present-value terms. Compare it to your cost of capital: an IRR above the hurdle rate means the project is worth doing.
Formula
Solve for r: Σ (Cash flowₜ ÷ (1 + r)ᵗ) = 0
Inputs explained
| Input | Unit | Required | Notes |
|---|---|---|---|
| Initial investment | selected currency | Yes | Positive number, treated as an outflow at time 0. Accepts 0 or more. |
| Future cash flows | text | Yes | Separate values with commas, spaces or new lines. |
| Required rate of return | % | Optional | Optional — compares IRR against your hurdle. |
| Currency | one of 10 options | Optional | — |
How to use it
- Choose Currency.
- Enter Initial investment and Future cash flows.
- Optionally add Required rate of return.
- Select Calculate.
Worked example
Invest $10,000 and receive $3,000, $4,000, $5,000 and $6,000 over four years.
- Initial
- 10000
- Flows
- 3000, 4000, 5000, 6000
IRR ≈ 24.9%, comfortably above a 10% hurdle.
Frequently asked questions
Why can IRR be misleading?
It assumes every interim cash flow is reinvested at the IRR, which is rarely achievable. It also ignores project size — a 40% IRR on $1,000 creates less value than 15% on $1 million.
What if the calculator cannot find an IRR?
Your cash flows probably never change sign, so no rate makes the NPV zero. IRR needs at least one outflow and one inflow.