IRR Calculator

Modify the values and click the Calculate button to use

Use a recurring deposit or withdrawal.

IRR: 29.768% per year

IRR: 29.768%
Periods: 30
Cumulative Flows: $3,000.00
Total Return: $8,000.00
Gross Return: 80.000%

Cash flow schedule

Period	Cash Flow	Cumulative
0	-$10,000.00	-$10,000.00
1	$100.00	-$9,900.00
2	$100.00	-$9,800.00
3	$100.00	-$9,700.00
4	$100.00	-$9,600.00
5	$100.00	-$9,500.00
6	$100.00	-$9,400.00
7	$100.00	-$9,300.00
8	$100.00	-$9,200.00
9	$100.00	-$9,100.00
10	$100.00	-$9,000.00
11	$100.00	-$8,900.00
12	$100.00	-$8,800.00
13	$100.00	-$8,700.00
14	$100.00	-$8,600.00
15	$100.00	-$8,500.00
16	$100.00	-$8,400.00
17	$100.00	-$8,300.00
18	$100.00	-$8,200.00
19	$100.00	-$8,100.00
20	$100.00	-$8,000.00
21	$100.00	-$7,900.00
22	$100.00	-$7,800.00
23	$100.00	-$7,700.00
24	$100.00	-$7,600.00
25	$100.00	-$7,500.00
26	$100.00	-$7,400.00
27	$100.00	-$7,300.00
28	$100.00	-$7,200.00
29	$100.00	-$7,100.00
30	$15,100.00	$8,000.00

What this IRR calculator does

The internal rate of return, or IRR, is the annual rate that makes the net present value of a series of cash flows equal to zero. This calculator supports two patterns: a fixed recurring deposit or withdrawal, and a different cash flow for each year.

IRR is useful for comparing investments with different cash flow patterns. It is not the same as a simple holding-period return, because it accounts for the timing of each cash flow.

How to use this calculator

Choose Fixed Cash Flow for a recurring deposit or withdrawal.
Enter the initial investment, holding period, ending balance, payment amount, frequency, and timing.
Choose Irregular Cash Flow for a different amount each year, then enter the yearly cash flows.
Click Calculate.

The default fixed example invests $10,000, withdraws $100 per month for 2 years 6 months, and ends with a $15,000 balance. The IRR is 29.768% per year.

IRR formula

The calculator solves for the rate that satisfies:

NPV(r) = Σ CF_t / (1 + r)^t = 0

CF_t is the cash flow at time t. The initial investment is a negative cash flow, and withdrawals or ending proceeds are positive cash flows. The solution is found with a numerical search.

For the fixed cash flow version, the monthly IRR is converted to an effective annual rate:

Annual IRR = (1 + Monthly IRR)^12 − 1

For the irregular version, each cash flow is treated as one year apart, so the solved rate is already annual.

What the results include

IRR: the annualized internal rate of return.
Cumulative flows: the total deposits or withdrawals in the fixed version.
Further investments: additional negative cash flows in the irregular version.
Total return: ending value plus withdrawals minus the initial investment and deposits.
Gross return: total return divided by the total amount invested.
Cash flow schedule: each period's cash flow and cumulative total.

Assumptions and limitations

The calculator assumes cash flows occur at the selected regular interval or at the end of each year. It does not include taxes, fees, inflation, or risk. A series of cash flows can have more than one IRR; this version reports the rate found by its numerical search in the supported range. If no rate solves the cash flows, the result is shown as not available.

Frequently asked questions

What does an IRR of 20% mean?

It means the cash flows earn an effective annual return of 20% after accounting for the timing of each deposit, withdrawal, and ending balance.

Why can IRR be negative?

If the investment returns less than the amount invested, the rate that discounts the cash flows to zero can be negative. A negative IRR indicates a loss.

What is the difference between IRR and ROI?

ROI compares total gain with total cost and ignores timing. IRR accounts for when each cash flow occurs, so it can differ from ROI when money is added or withdrawn over time.

Can IRR be used for a loan?

Yes. For a loan, the initial amount received is a positive cash flow and the payments are negative cash flows. The resulting IRR is the effective cost of borrowing.

Source

References:

Disclaimer

This calculator is for informational purposes only. It is not investment advice. IRR is sensitive to the timing and size of cash flows, and actual results may differ.

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