Free tool
IRR Calculator
Enter your investment and cash flows to get the internal rate of return instantly — with an NPV sanity check at your own discount rate. Free, no signup, matches Excel's IRR().
How IRR is calculated
The internal rate of return is the discount rate that makes the net present value of your cash-flow series exactly zero:
NPV = Σ CFₜ / (1 + IRR)ᵗ = 0 for t = 0 … n
There is no closed-form solution, so the calculator solves the equation numerically — Newton-Raphson iteration with a bisection fallback — exactly as Excel's IRR() function does. For monthly or quarterly flows, the solved per-period rate is annualized by compounding: (1 + r)periods per year − 1.
How to use the IRR calculator
- 1
Pick your cash-flow period
Choose annual, quarterly, or monthly — whatever spacing your cash flows actually have. The IRR is solved per period and annualized for you.
- 2
Enter your initial investment
The amount you put in at time zero. It's treated as money out (a negative flow), which is what makes an IRR exist.
- 3
Add a cash flow for each period
One row per period, in order. Inflows are positive, additional outflows are negative. Add or remove rows as needed — results update instantly.
- 4
Read the IRR and check the NPV
The headline figure is the annualized IRR. Use the NPV at your own discount rate as a sanity check: below the IRR it should be positive, above it negative.
Frequently asked questions
- What is IRR (internal rate of return)?
- IRR is the discount rate at which a series of cash flows has a net present value (NPV) of exactly zero. Intuitively, it's the annualized rate of return an investment earns given when money goes out and when it comes back. A project is conventionally attractive when its IRR is higher than your required rate of return (hurdle rate).
- How does this calculator compute IRR?
- It solves NPV(r) = 0 numerically using Newton-Raphson iteration, with a bracketing bisection fallback for series where Newton's method diverges. This is the same equation Excel's IRR() function solves, and results match Excel to at least two decimal places.
- Why does it say IRR is undefined for my numbers?
- IRR only exists when the cash-flow series changes sign at least once — you need at least one outflow (negative) and one inflow (positive). If every flow points the same way there is no rate that makes NPV zero, so any number a tool returned would be wrong. Enter your initial investment as money out and later returns as money in.
- Why does it warn that my series can have more than one IRR?
- When cash flows change sign more than once (for example: invest, receive income, then pay a large decommissioning cost), the NPV equation can have multiple valid roots. The calculator still shows one mathematically valid rate but flags the ambiguity — in that situation NPV at your own discount rate is the more reliable decision metric.
- What's the difference between the per-period IRR and the annualized IRR?
- If your cash flows are monthly or quarterly, the solver finds the rate per month or per quarter. The annualized figure compounds that rate over a full year — (1 + r)^12 − 1 for monthly, (1 + r)^4 − 1 for quarterly — so you can compare it against annual rates like a hurdle rate or a market return.
- What is the NPV check for?
- NPV discounts every cash flow back to today at a rate you choose and sums them. It's a sanity check on the IRR: at any discount rate below the IRR the NPV should be positive, and above it negative. It's also the better metric when IRR is ambiguous or when you're comparing projects of different sizes.
- Is my data stored anywhere?
- Your cash flows are saved only in your own browser's localStorage so they survive a page refresh. Nothing you type is sent to a server, and no signup is required.
- Does IRR account for inflation or risk?
- No. IRR is a purely mathematical property of the cash flows you enter. To account for inflation or risk, compare the IRR against a hurdle rate that includes them, or run the NPV check with a discount rate that reflects your cost of capital.