How to use the IRR Calculator
The IRR calculator finds the annual return that makes the present value of a series of cash flows equal zero.
What you need to enter
- Cash flows (comma separated, first is the investment)
The formula
Solve Σ cash flow ÷ (1 + IRR)^t = 0, where the first (negative) value is the investment.
Worked example
Using the default values in the calculator:
- Cash flows (comma separated, first is the investment): -10000, 2500, 3500, 4500, 3000
| IRR | 12.596% |
| Net total cash flow | $3,500.00 |
| Periods | 4 |
Tips for better results
- Use it to compare projects with different timing.
- Check results with NPV.
Common mistakes to avoid
- Entering cash flows in the wrong order.
- Using IRR for flows that change sign many times.
Please note: Calculators and guides give general estimates, not financial, tax or investment advice. Real offers depend on your lender, location and personal situation. See our Disclaimer.