IRR calculator
IRR sums up a project's profitability as one yearly rate you can compare with your cost of funding or another return.
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How to use it
- Enter initial investment (today) and yearly cash flows (one per line).
- The result appears straight away and updates as you edit.
- Copy the result, or copy a link that keeps the same values to share it.
How it is calculated
IRR is the rate r where -initial investment + sum of (cash flow t ÷ (1 + r)^t) = 0, solved numerically by bisection.
Example
Inputs: Initial investment (today) = 10,000. Result: Internal rate of return (IRR): 15.32%; Net cash flow, undiscounted: 4,000.00.
Limits and caveats
- If the flows change sign more than once there may be several IRRs; the one closest to zero is shown with a note about the rest.
- It implicitly assumes flows are reinvested at the same rate.
Questions about this tool
When is a project worth it by IRR?
When the IRR is above your cost of funding or required return. At exactly that rate, NPV is zero.
Does it match Excel's IRR function?
Yes, when you list the initial investment first as a negative value, followed by the yearly flows in order.
How is IRR different from ROI?
ROI is the total gain regardless of timing, while IRR accounts for when each amount arrives and gives a yearly rate.