IRR Calculator

What is the IRR Calculator?

Find the internal rate of return (IRR) — the discount rate that makes NPV equal zero. IRR expresses an uneven series of cash flows as a single annual return, making projects and investments with different timings comparable.

How to use the IRR Calculator

1. Enter your cash flows.
2. Results update automatically as you type; you can also press Calculate.
3. Read the output: irr, sum of cash flows.
4. Use the 📊 chart to see the result visually, then copy or share it.

Formula and method

Worked example

With cash flows = -10000, 3000, 4000, 4000, 3000, the IRR Calculator returns irr: 14.90%; sum of cash flows: $4,000.00.

Where the IRR Calculator helps in real life

You are considering buying equipment for $20,000 that should bring in different amounts over five years. IRR gives one rate you can compare with your cost of borrowing.

You invested in a rental property with a large up-front cost, yearly rent and a sale at the end. Entering each year’s cash flow shows the annual return across the whole holding period.

Common mistakes to avoid

• Entering the initial investment as a positive number instead of negative.
• Leaving out a year with zero cash flow, which shifts the timing.
• Relying on IRR alone when cash flows change sign several times, which can give multiple answers.
• Comparing projects of very different sizes using IRR alone.

💡 Practical tip: If IRR is higher than the rate you can borrow at, the project is likely worth a closer look — confirm with NPV.

Tips for better results

• Check the result with NPV at your required rate of return.
• Use consistent periods: all years or all months.
• Include the final sale or salvage value in the last period.

⚠️ These results are for educational purposes and are not financial advice. Confirm figures with your lender or a licensed financial professional before making decisions.

Related tools