IRR Calculator
Calculate the internal rate of return (IRR) and net present value (NPV) for an initial investment and a series of cash flows.
| Period | Cash Flow | Cumulative Cash Flow |
|---|---|---|
| 0 | -$50,000.00 | -$50,000.00 |
| 1 | $12,000.00 | -$38,000.00 |
| 2 | $15,000.00 | -$23,000.00 |
| 3 | $18,000.00 | -$5,000.00 |
| 4 | $20,000.00 | $15,000.00 |
| 5 | $22,000.00 | $37,000.00 |
An IRR of 19.44% is the discount rate at which this cash flow stream breaks exactly even.
- NPV at 0%$37,000.00
About the IRR Calculator
A simple return percentage treats every dollar of cash flow as if it landed on the same day, but real investments pay out unevenly over years — a big return in year 5 isn't worth the same as the same dollar amount in year 1. Internal rate of return solves for the single discount rate at which the present value of every future cash flow exactly equals your initial outlay, which is what makes it comparable across investments with completely different payout timing.
This is the calculator for comparing investments that don't pay out on a neat schedule — a rental property with irregular cash flows, a business expansion project, a private investment with staggered distributions — where you need one number that accounts for both the size and the timing of what comes back to you, not just the total.
The investment amount and cash flow figures you're testing are calculated locally and never leave your browser — useful when the numbers involved are for a deal you haven't committed to yet and would rather not have tied to your identity anywhere.
How it’s calculated
IRR is found by solving for the rate at which net present value equals zero — in other words, the rate that makes the discounted value of every future cash flow exactly offset your initial investment. There's no closed-form formula for this, so it's solved iteratively by testing rates until NPV converges to zero.
A higher IRR means the investment's cash flows are worth more relative to what you put in, discounted for timing. Comparing an IRR to your required rate of return (sometimes called a hurdle rate) is the standard way to judge whether a project clears the bar.
Frequently asked questions
What counts as a 'good' IRR?
It depends entirely on what you're comparing it against — your cost of capital, what you could earn on a similarly risky alternative, or a hurdle rate you've set for the type of investment. There's no universal good number; an IRR is only meaningful relative to what else you could do with the money.
Why might this calculator say no IRR was found?
IRR requires at least one sign change in the cash flow stream — an initial outflow followed by inflows, typically. If the cash flows never cross zero at any reasonable rate, or if there are multiple sign changes that produce more than one mathematically valid IRR, the solver can fail to converge on a single answer.
What's the difference between IRR and NPV?
NPV gives you a dollar amount — the value created above your required return, at a rate you specify. IRR gives you a percentage — the rate at which the investment breaks exactly even. NPV is generally considered the more reliable metric for comparing investments of different sizes; IRR is more intuitive but can be misleading when comparing projects of very different scale.
Can an investment have more than one IRR?
Yes, if the cash flow stream changes sign more than once (outflow, then inflow, then another outflow, for example), the math can produce multiple valid solutions. That's an edge case worth watching for in projects with cash calls partway through, like a real estate deal with a later capital improvement.
Related calculators
Powered by GetCalculator.online