Calculate IRR

Find the periodic discount rate that reduces a sequence of regularly spaced cash flows to zero net present value.

freeworks offlinenothing uploaded
ToolIRR Calculator
Input
Output
—
Put this on your own site

The frame below runs the same code as this page, in the reader's own browser. Nothing is sent to us, and nothing is sent to you.

Pick a dark background and the text and panels follow it, so the frame stays readable on a dark page.

Preview

How it works

Bisection evaluates NPV while narrowing a fixed bracket from -99.99% to 1,000% for 200 iterations. This deterministic search cannot diverge like Newton iteration, but it returns one bracketed root and does not enumerate multiple IRRs.

Formula
0 = Σ cash flowₜ ÷ (1 + IRR)ᵗ
  • At least one payment and one receipt are required before a zero-NPV rate can exist.
  • Cash-flow positions are equal periods; dated irregular flows require XIRR instead.

Worked example

A four year project
1000 out, then 300, 400, 500 and 600 back
Input
											-1000,300,400,500,600
Output
												IRR percent: 24.89
NPV at IRR: 0
Total in: 1800
Total out: 1000
Multiple: 1.8

When to use this

Capital expenditure reviews, private-equity distribution schedules, and Excel model checks compare periodic project returns with a required hurdle rate.

Edge cases

  • A series containing only positive or only negative amounts is rejected because no investment rate can reverse the NPV sign.
  • If no sign change is bracketed between -99.99% and 1,000%, processing stops rather than returning an out-of-range rate.
  • Cash flows with more than one sign reversal can have multiple IRRs; bisection returns only the root bracketed by this fixed search and does not enumerate alternatives.

References