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IRR calculator (internal rate of return)

Enter the investment as a negative year-0 cash flow and the returns that follow. The IRR is the discount rate at which NPV equals zero.

%
Cash flows (year 0 = today)
Year 0
Year 1
Year 2
Year 3
Year 4

Internal rate of return

13.05%

NPV at hurdle rate

8,631.92

IRR vs hurdle

Above

How it's calculated

Internal rate of return

0 = Σ CFₜ ÷ (1 + IRR)ᵗ

IRR
solved numerically — there is no closed-form formula

Assumptions

  • Periodic cash flows (one per period), the first at time 0.
  • Solved with Newton's method, falling back to bisection.

Limitations

  • Cash flows that change sign more than once can have several IRRs; use NPV for those projects.
  • IRR ignores project size: for mutually exclusive projects, compare NPVs.

For education and planning. Results are estimates, not financial advice.