Using the IRR Calculator
Enter the initial investment as a negative number and later receipts as positive numbers. The period between entries matters: annual entries produce an annual IRR, while monthly entries produce a monthly IRR.
Worked example
Use the example inputs below to reproduce this result. These are the form's starting values, not recommended targets. Changing your inputs updates your result above; this worked example stays fixed for comparison. Results are rounded for display.
Example inputs
- Initial negative investment, then nonnegative periodic cash flows
- -10000, 3000, 4000, 5000
Example result
- IRR per period (%)
- 8.9
Method and assumptions
Solves NPV = 0 with equal-period cash flows. Restricts input to conventional cash flows to avoid ambiguous multiple roots.
Keep accounting and cash timing separate
Business calculations can describe profitability, asset values or the timing of cash flows. These are related but different questions. Check which one the tool answers before using the result in a decision. A cash payment, an accounting expense and an investment return may occur in different periods, even when they relate to the same transaction.
Common question
Is a monthly IRR already an annual return?
No. To express a monthly rate as an effective annual rate, compound it over twelve months. Simply multiplying by twelve gives a nominal annualized rate instead.
Guide updated .