Payback period calculator
Measure the number of periods required for future cash flows to recover the initial investment and compare simple with discounted payback.
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- Instant
- Free
- No account
- Works offline
Payback period
Enter the initial investment, future cash flows and a rate to compare simple and discounted recovery.
One amount per line, in period order.
Why use this tool?
Payback period measures how long cumulative cash flows take to offset the initial investment. Discounted payback also reflects the time value of money.
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Your data stays on your device and is never sent to our servers.
Smart processing
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 accumulates cash flows period by period until their total offsets the initial investment. When recovery occurs during a period, the tool estimates the required fraction by assuming that period’s cash flow is earned evenly. Discounted payback first discounts every cash flow using the selected rate and then performs the same accumulation. It is therefore usually longer than simple payback. If the entered flows never recover the committed capital during the analysed horizon, the result remains marked as not recovered.
Use cases
Measure liquidity
Estimate how many periods are required before cumulative cash flows repay the initial capital.
Compare projects
Compare recovery periods across projects built with consistent time periods and cash-flow assumptions.
Test discounting
Measure the gap between simple and discounted payback when the time value of money is included.
Guide
How to use this tool
- 1
Enter the investment
Provide the amount committed initially.
- 2
Add cash flows
Enter inflows or outflows by period.
- 3
Compare periods
Review simple and discounted payback.
Tips and best practices
- A short payback does not guarantee strong profitability.
- Payback ignores cash flows after recovery.
- Use NPV and IRR alongside payback for a fuller analysis.
Frequently asked questions
What is discounted payback?
It discounts each cash flow before measuring when the investment is recovered, so the time value of money is included.
Why can the result say not recovered?
The entered cash flows do not offset the initial investment within the analysed period even after they are accumulated.
How is the fractional period calculated?
The tool assumes the recovery-period cash flow is earned evenly through that period and estimates the fraction required.
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