IRR Calculator
Calculate the internal rate of return (IRR) for any series of cash flows — the discount rate at which net present value equals zero.
How to use the IRR Calculator
- Enter your inputs into the IRR Calculator above.
- Results update instantly as you type — no submit button needed.
- Adjust any value to see how the result changes in real time.
The IRR definition
0 = Σ CF_t / (1 + IRR)^t
IRR is the rate that makes the present value of all future cash flows (positive and negative) equal zero. Solved iteratively. Useful for comparing investments with different sizes, timing or durations.
Worked example
Initial investment −$10,000; cash flows +$2,500 each year for 5 years. IRR ≈ 7.93%. If your required rate of return is 7%, this investment passes; if 9%, it doesn't.
Frequently asked questions
What is the difference between IRR and ROI?
ROI is a single ratio of total gain to investment, ignoring timing. IRR is an annualized rate that accounts for when each cash flow occurs.
Can IRR be negative?
Yes — when cumulative cash flows fail to recover the investment, IRR is negative. Some cash flow patterns produce multiple IRRs; in those cases, use MIRR (Modified IRR) or NPV at a chosen rate.
What is a "good" IRR?
Depends on the asset class. Public stocks have long-run IRRs around 7–10%; venture capital aims for 20%+; bonds 3–6%. Compare IRR to your cost of capital or alternative investments.