IRR calculator
The internal rate of return (IRR) is the annual discount rate at which the net present value of all cash flows equals zero. It accounts for timing, so two investments with the same multiple can have very different IRRs.
Your cash flows
Enter the investment and at least one annual cash flow.
Inputs
- Investment at t = 0
- Entered as a positive amount paid; treated as a negative cash flow.
- Annual cash flows
- Distributions (positive) or further investments (negative) at each year end, including exit proceeds in the final year.
Outputs
- IRR
- Annual rate where NPV = 0.
- MOIC
- Total positive flows ÷ total negative flows.
- Cash flow table
- Each year's flow and its present value at the IRR.
How it is calculated
Solve 0 = Σ CFt ÷ (1 + IRR)t for IRR.
This calculator uses bisection between −99.99% and 1,000%, which is reliable when cash flows change sign once. It reports no result when every flow has the same sign.
Worked example (illustrative)
Illustrative only: invest $100 and receive $200 at the end of year 3. IRR = 2^(1/3) − 1 ≈ 26.0%. Receiving the same $200 in year 5 gives about 14.9%.
Assumptions and limitations
- Annual periods only.
- Flows that change sign more than once can have more than one IRR; the calculator returns one.
- IRR assumes interim cash can be reinvested at the IRR, which may overstate returns.
- Gross of fees unless your inputs are net.
Questions and answers
What is a good IRR?
It depends on risk and the alternatives; compare with your required return.
Why can IRR and MOIC disagree?
MOIC ignores time. A quick 1.5x can beat a slow 2.0x on IRR.
Why is there no result?
IRR needs at least one negative and one positive cash flow.
How is IRR related to NPV?
IRR is the rate at which NPV is exactly zero.
Should I use XIRR?
For irregular dates, yes. This tool uses whole years.
Sources
Content reviewed October 9, 2026 by the SourceX Partnerships Team. Results are calculated in your browser; nothing you type is stored.