Investing & Retirement

IRR Calculator (Internal Rate of Return and NPV)

List the cash flows, starting with the investment as a negative number.

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Your numbers

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Your results

Internal rate of return (IRR)
Internal rate of return (IRR)
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Net present value at the discount rate
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Sum of all cash flows
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Decision at this discount rate
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IRR Calculator (Internal Rate of Return and NPV) by TheCalcTools

How the IRR Calculator (Internal Rate of Return and NPV) works

IRR is the discount rate at which the net present value of the cash flows is zero. The first flow is at time 0, the next at the end of period 1, and so on. The calculator solves for it numerically.

Projects with an IRR above the cost of capital add value. Cash flows that change sign more than once can have several IRRs; then rely on NPV.

The formula

0 = Σ CFₜ ÷ (1 + IRR)^tNPV = Σ CFₜ ÷ (1 + r)^t

Worked example

Using the default values shown in the calculator:

Cash flows per period (first one negative)-50000, 12000, 15000, 18000, 20000, 9000
Discount rate for NPV10 %
  1. Investing 50,000 and receiving 12,000, 15,000, 18,000, 20,000 and 9,000: IRR = 14.60%.
  2. At 10% the NPV is $6,078.01.

Result:

Internal rate of return (IRR)14.60%
Net present value at the discount rate$6,078.01
Sum of all cash flows$24,000.00
Decision at this discount rateAccept: IRR above the discount rate

Frequently asked questions

IRR or NPV?

NPV gives the value added in money and handles unusual cash flows; IRR gives an easy-to-compare percentage. Use both.

Sources and further reading

Net Present Value (NPV) CalculatorIs a project worth doing at your required rate of return? Payback Period CalculatorHow soon does a project pay for itself? ROI CalculatorMeasure how much an investment, project or campaign earned compared with what it cost… CAPM Calculator (Expected Return and Cost of Equity)Enter the risk-free rate, the stock's beta and the expected market return Present Value CalculatorWhat is a future amount worth today? Future Value Calculator (Lump Sum Plus Regular Deposits)Enter a starting amount, a regular payment, the rate and the number of periods

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This calculator gives estimates for information only. It is not financial advice, and your lender's or provider's figures will govern. Rates, fees and rules vary. See our disclaimer.