Skip to content
Calqora

IRR Calculator

Calculate the internal rate of return (IRR) for a series of cash flows - the discount rate at which an investment breaks even.

$

Use a negative number for investments/outflows

$

Use a negative number for investments/outflows

$

Use a negative number for investments/outflows

$

Use a negative number for investments/outflows

$

Use a negative number for investments/outflows

Internal rate of return (IRR)

17.19%

What Your Result Means

IRR is the annualized rate of return at which the investment's net present value equals zero. A higher IRR generally means a more attractive investment - compare it against your required rate of return or cost of capital to decide whether to proceed.

How It Is Calculated

IRR is the rate r where: Σ [Cash Flow(t) / (1 + r)^t] = 0

Worked Example

A $50,000 initial investment returning $15,000, $18,000, $20,000, and $22,000 over the following four years produces an IRR of roughly 20%.

Important Assumptions

  • Enter Year 0 as a negative number (your initial investment/outflow) and subsequent years as positive returns.
  • This calculator uses a numerical method (bisection) to solve for IRR - unusual cash flow patterns with multiple sign changes may have multiple valid IRRs or none.

Frequently Asked Questions

What's a good IRR?
It depends on the investment type and risk level - compare the calculated IRR against your cost of capital or a benchmark return for similar investments to judge attractiveness.
IRR vs. ROI - what's the difference?
ROI is a simple total percentage return over the whole period. IRR is an annualized rate that accounts for the timing of cash flows, making it more useful for comparing investments with different timelines.

Related Calculators

Payback Period Calculator

Calculate how long it takes an investment to pay for itself from its cash flows.

ROI Calculator

Calculate return on investment as a percentage and net gain.

Present Value Calculator

Calculate the present value of a future sum of money.

Methodology

This calculator uses a bisection numerical method to solve the IRR equation, since it generally has no closed-form solution. See our methodology page for details.

Results depend entirely on the assumptions and figures you enter. Actual business performance may differ. This calculator does not provide accounting, tax, or legal advice.