IRR Calculator
Estimate the annual internal rate of return on a sequence of evenly spaced yearly cash flows.
FREE ONLINE CALCULATOR
IRR Calculator
Change the settings below to calculate your result. You can check the assumptions further down this page.
IRR is the discount rate for which the net present value of cash flows equals zero.
How to use this irr calculator
Enter an initial cash outflow and four subsequent yearly net cash flows. The calculator searches numerically for a rate that makes discounted flows sum to zero.
Formula and calculation method
IRR is the discount rate for which the net present value of cash flows equals zero.
Worked example
A project with a negative initial cost and positive future receipts may have a positive IRR, depending on the timing and size of receipts.
Understanding the result
IRR is the annual discount rate that balances the present value of inflows and outflows. It accounts for when money is received, but it can be difficult to interpret when cash flows change sign several times or when projects have different investment sizes.
When to use this calculator
List every cash flow in the correct year and use negative signs for investments or costs. For projects with irregular dates rather than equal annual intervals, a dated cash-flow method such as XIRR would be more suitable.
What the results do not include
Some cash-flow patterns have multiple IRRs or no solution. This tool reports one numerical solution when it can find one.
Frequently asked questions
Are flows monthly or yearly?
They are annual: the initial amount occurs now and later values occur at the ends of years 1–4.
Does a higher IRR always mean a better choice?
No. Scale, risk, cash-flow timing and assumptions matter too.
For education and estimates only. Check any contractual, tax, banking or employment terms that apply to your situation. The calculations are not financial advice or guaranteed returns.