IRR Calculator

Calculate the Internal Rate of Return for an investment using Newton's method

Last reviewed: July 2026How we build & verifyEstimate only. Verify important decisions with a qualified professional

Initial Investment ($)

Yearly Cash Flows

Year 1

Year 2

Year 3

Year 4

Year 5

How it works

Internal Rate of Return is the discount rate at which a project net present value equals zero, expressed as an annualised percentage. It answers what compound return a series of cash flows actually earns.

Formula

Solve for r:  0 = −C₀ + Σ CFₜ / (1 + r)^t

Variables

rthe internal rate of return being solved for
C₀initial outflow at time zero
CFₜcash flow in period t

Worked example

Inputs: $10,000 invested, returning $4,000 at the end of each of 3 years

Try 8%: 4000/1.08 + 4000/1.08² + 4000/1.08³ = 10,308 → NPV positive, so r is higher
Try 12%: 4000/1.12 + 4000/1.12² + 4000/1.12³ = 9,607 → NPV negative, so r is lower
Iterate between the two until NPV ≈ 0 at r ≈ 0.0970

Result: IRR ≈ 9.70% per year

Notes

There is no closed-form solution. Every IRR is found by iteration, which is why results can differ slightly between tools.
A cash flow series that changes sign more than once can have multiple valid IRRs. Mining and decommissioning projects with a large end-of-life cost are the classic case.
IRR implicitly assumes interim cash flows are reinvested at the IRR itself, which flatters high-IRR projects. MIRR fixes this by letting you set a separate reinvestment rate.
For irregularly dated flows use XIRR, which discounts by actual days rather than assuming even periods.

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Frequently Asked Questions

Yes. Irr Calculator costs nothing, needs no account, and runs right in your browser. There is no paywall, no watermark on the results, and no limit on how many times you can run the numbers.

Irr Calculator uses the standard formula for this kind of calculation, so the output is only as good as the figures you type in. Rates, fees, and rules in finance shift over time, and we review the underlying assumptions on a regular schedule; check the "Last reviewed" date above for the most recent pass. Spotted something off? There's a feedback button in the bottom-right corner.

Treat the output of Irr Calculator as a starting point, not final advice. Tax filings, loan approvals, insurance claims, property deals, and legal matters all depend on details a calculator cannot see: your full financial picture, local rules, and the specifics of your paperwork. Run the numbers here, then confirm anything consequential with an accountant, lawyer, or licensed advisor.

How it works

Formula

Solve for r:  0 = −C₀ + Σ CFₜ / (1 + r)^t

Variables

rthe internal rate of return being solved for
C₀initial outflow at time zero
CFₜcash flow in period t

Worked example

Inputs: $10,000 invested, returning $4,000 at the end of each of 3 years

Try 8%: 4000/1.08 + 4000/1.08² + 4000/1.08³ = 10,308 → NPV positive, so r is higher
Try 12%: 4000/1.12 + 4000/1.12² + 4000/1.12³ = 9,607 → NPV negative, so r is lower
Iterate between the two until NPV ≈ 0 at r ≈ 0.0970

Result: IRR ≈ 9.70% per year

Notes

There is no closed-form solution. Every IRR is found by iteration, which is why results can differ slightly between tools.
A cash flow series that changes sign more than once can have multiple valid IRRs. Mining and decommissioning projects with a large end-of-life cost are the classic case.
IRR implicitly assumes interim cash flows are reinvested at the IRR itself, which flatters high-IRR projects. MIRR fixes this by letting you set a separate reinvestment rate.
For irregularly dated flows use XIRR, which discounts by actual days rather than assuming even periods.

IRR Calculator

Yearly Cash Flows

How it works

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Frequently Asked Questions

IRR Calculator

Yearly Cash Flows

How it works

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Frequently Asked Questions