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About the IRR Calculator
This calculator computes the Internal Rate of Return (IRR) for an investment project. Enter your initial outlay and the cash flows for each period, and the tool returns the annual rate at which the project breaks even. The output appears as a percentage you can compare with your cost of capital.
IRR is the discount rate that makes the net present value of all cash flows equal to zero. Because no closed-form formula exists, the calculator solves NPV = 0 iteratively, testing rates until the result converges. You need the initial investment amount, the number of periods, and the expected cash flow for each period. Pair IRR with net present value, since IRR alone assumes reinvestment at the same rate. For major financial decisions, consider consulting a professional.
- Enter the initial investment as a negative amount.
- Add each period's cash flow in chronological order.
- Press calculate and read the IRR percentage shown.