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Finance & business

IRR calculator – internal rate of return

Calculate the discount rate that makes the net present value of a cash-flow series equal to zero.

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Internal rate of return

Enter the initial investment and one cash flow per period to estimate IRR.

One amount per line. IRR assumes equal-length periods.

Estimated IRR—
Total net cash flow—
Estimated IRR—

Why use this tool?

IRR is the implicit return rate of periodic cash flows: the discount rate at which NPV equals zero.

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Calculate and compare financial scenarios with clear indicators and explicit formulas.

Supported formats

Amounts, rates, terms and financial assumptions depending on the calculator.

Save time

Get a clean, ready-to-use result in seconds without installing software or configuring a complex workflow.

Fonctionnement

How does this tool work?

The calculation searches for the discount rate that makes the net present value of all cash flows equal to zero. The initial investment and each periodic cash flow are included according to their position in time, then the algorithm tests and refines the rate until NPV is sufficiently close to zero. The result is expressed as a percentage per period. It still requires careful interpretation because multiple sign changes in the cash-flow series can produce several mathematical solutions or prevent a single meaningful IRR from being found.

Use cases

Compare projects

Compare IRRs across investments built with consistent periods and comparable cash-flow assumptions.

Test profitability

Compare the calculated IRR with a relevant hurdle rate or cost of capital for the project.

Analyse cash flows

See how the timing and amount of future cash flows change the project’s implicit rate of return.

Guide

How to use this tool

  1. 1

    Enter the investment

    Provide the initial cash outflow.

  2. 2

    Add cash flows

    Enter one flow per period.

  3. 3

    Read IRR

    The result is estimated automatically when a solution exists.

Tips and best practices

  • IRR assumes equal-length periods.
  • Multiple sign changes can lead to multiple IRRs or no unique result.
  • Compare IRR with a hurdle rate appropriate to the project.

Frequently asked questions

How is IRR different from ROI?

ROI is a simple overall return, while IRR considers the timing of cash flows and expresses an implicit periodic return rate.

Why is no IRR shown?

Some cash-flow series do not have a unique solution in the searched range, especially when the sign changes more than once.

Does IRR include risk?

Not directly; risk is reflected mainly in the benchmark rate used for comparison and in the cash-flow assumptions.

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