This IRR calculator finds the internal rate of return of an investment from its upfront cost and yearly cash flows. It also gives the net present value (NPV) at your chosen discount rate, the modified IRR (MIRR) and the payback period, so you can judge a project from several angles.
| Cash flow for year 1, 2, 3 … (use − for costs) |
|---|
What is IRR?
The internal rate of return is the yearly return that makes the net present value of all cash flows equal to zero. In plain terms, it is the interest rate the investment effectively earns on the money tied up in it.
0 = −C₀ + CF₁ ÷ (1 + IRR) + CF₂ ÷ (1 + IRR)² + … + CFₙ ÷ (1 + IRR)ⁿ
There is no direct formula for IRR, so the calculator finds it by narrowing down the rate until NPV reaches zero.
Worked example
You invest $10,000 and receive $3,000, $4,200 and $6,800 over the next three years. The IRR is about 16.34%. At an 8% discount rate, the NPV is about $1,777, so the project beats an 8% required return.
IRR vs NPV vs MIRR
| Measure | What it tells you | Watch out for |
|---|---|---|
| IRR | The project’s own rate of return | Assumes cash is reinvested at the IRR; can give several answers |
| NPV | Value added in today’s money at your required return | Depends on the discount rate you choose |
| MIRR | Return assuming reinvestment at your discount rate | Usually lower and more realistic than IRR |
| Payback | How fast you get your money back | Ignores time value and later cash flows |
How to use IRR in decisions
- Accept a project when its IRR is above your cost of capital or required return.
- When comparing projects of different sizes, prefer NPV: a small project can have a high IRR but add little value.
- If cash flows switch between positive and negative more than once, rely on MIRR and NPV.
Frequently asked questions
What is a good IRR?
It depends on the risk and your cost of capital. An IRR is good when it is comfortably above the return you could earn on an investment of similar risk.
What is the difference between IRR and ROI?
ROI is the total gain as a percentage of cost and ignores timing. IRR is a yearly rate that accounts for when each cash flow arrives.
Why does my investment have no IRR?
If the cash flows never add up to more than the investment, no discount rate can make NPV zero, so there is no IRR.
Can a project have more than one IRR?
Yes, when cash flows change sign more than once, for example a large cost in the middle of a project. Use MIRR or NPV in that case.
Is this the same as Excel’s IRR function?
Yes. With yearly cash flows it matches Excel’s IRR, and the MIRR uses your discount rate for both financing and reinvestment, like MIRR with equal rates.
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Last reviewed: October 2026. This calculator is for education only and is not financial, tax or legal advice.