The IRR calculator finds the yearly rate that makes NPV zero. With 10,000 up front and inflows of 3,000, 3,500, 4,000, and 4,500, IRR is about 17.09%, above an 8% hurdle. Simple payback lands after year 3 — recovery time, not a stand-in for the rate.
Enter the initial investment and each year’s cash flow, then Calculate. The main result is IRR - the project’s annual rate.
IRR is the rate where NPV = 0. The 10000 and four-inflow example is about 17.09%. With several sign changes, check NPV.
Article hook: IRR 17.09% looks “better” than 8%, but without NPV you do not know if that is 2,000 of value or 2 million. Enter a hurdle and read NPV at that rate beside the project rate. With multiple sign changes, prefer NPV anyway.
IRR, the internal rate of return, asks what yearly rate a cash-flow series implies. You enter the initial investment as a positive number and the calculator places it in year 0 as an outflow. In later years you enter inflows as plus and extra outlays as minus. We search for a rate r such that the sum of CF_t / (1+r)^t = 0. Periods are full years.
First card: 10000 and 3000, 3500, 4000, 4500. IRR about 17.09%, above 8%. Simple payback lands after year 3, discounted payback at 8% after year 4. Second: 50000 and five inflows of 12000, last 18000, hurdle 10%. IRR about 9.42%, below the hurdle. The third has a −2000 in year 2 and IRR about 4.54% at a 12% hurdle; that is a multi-sign warning.
Enter Initial investment / cost as a positive number. Required return (% / year) is optional. Add cash-flow rows with the Add year button. Click Calculate and read IRR first. Payback and NPV at the hurdle are context.
NPV next door shows the same series in money at a entered discount rate: the same 10000 and the same four inflows yield about 2261 at 8%. CAGR needs only a start and an end, with no mid flows. Rate of return is two-point as well.
IRR does not show scale: 17% on 10000 is different money than 17% on a million. With several sign changes the root may not be unique. Then lean on NPV, not on the percent alone.
Enter 10000, an 8% hurdle, and four years 3000, 3500, 4000, 4500. Check about 17.09%. Then open NPV with the same numbers.
Model: internal rate of return (IRR) — rate r at which the NPV of the cash-flow series is zero.
Σt=0…n CFt / (1 + r)t = 0
Enter the initial investment as positive; year 0 stores it as a negative outflow. Solver: Newton, then bisection on (−0.99, 10).
IRR is the yearly rate that makes this series NPV zero. With 10000 up front and 3000, 3500, 4000, 4500, IRR is about 17.09%, above an 8% hurdle.
IRR ≈ 17.09%
Required return: 8%
Simple payback: after year 3
Discounted payback @ 8%: after year 4
What IRR do −10,000 and inflows 3,000–4,500 give? ≈ 17.09% (above 8%). Payback is recovery time, not an IRR substitute.
IRR ≈ 9.42%
Required return: 10%
What if IRR sits below a 10% hurdle? ≈ 9.42% — the project misses that bar; NPV at 10% will be negative.
IRR ≈ 4.54%
Required return: 12%
What if year 2 is a negative cash flow? Another sign change — IRR may not be unique; check NPV.
Multiple-sign-change warning
One numerical IRR root is shown
What about multiple sign changes? More than one NPV = 0 root is possible — decide with NPV, not IRR alone.
With multiple sign changes in the cash flows, do not decide on IRR alone - check NPV.
We solve for rate r where Σ CF_t / (1+r)^t = 0 over full years. Enter the initial investment as positive — the calculator places it in year 0 as an outflow.
When you enter a required return (e.g. 8%), the calculator computes NPV of the same series at that rate. With 10,000 and four inflows, NPV at 8% is about 2,261 — scale beside IRR.
Add years with the button, or paste a list (one per line or comma-separated) under options. Fill empty periods with zero.
The year when cumulative undiscounted cash flows reach zero or above. In the 10,000 and four-inflow example it lands after year 3.
With multiple sign changes the root may not be unique. Then decide with NPV at your discount rate, not the percentage alone.
CAGR uses only start, end, and time. IRR reads the full yearly cash-flow series, including mid-life deposits and withdrawals.
No. It is the rate that sets NPV of this series to zero — arithmetic from your numbers, not a product guarantee.
Up to 24 yearly periods. Longer horizons and monthly cash flows stay outside this model.
IRR is the rate that sets NPV of this series to zero. NPV at your required return is a dollar amount at that hurdle (for example 8%). Compare: IRR answers “what percent,” NPV answers “how much value at the rate you chose.”
No. Periods here are full years (up to 24). XIRR with irregular dates is outside this model — use an XIRR tool or a spreadsheet when you have calendar dates.
It is the year when cumulative cash flows, discounted at the required return, reach zero or above. At 8% in the 3,000–4,500 inflow example it lands after year 4 — later than simple payback.
IRR finds the rate where NPV drops to zero. It is a sketch from your cash flows.
Page updated in 2026.
