Currency: USD
Enter all amounts in USD. Changing currency keeps numbers unchanged; no exchange rate is applied.
- Detected IRR
- 8.9%
- Net present value
- $804.45
About this result
The search may miss tangent roots. Multiple IRRs can exist; NPV at a chosen discount rate may be more useful.
How it works
One investment can produce two IRRs
Try equal-period cash flows of −100, 230 and −132. Both 10% and 20% make net present value zero. A second change in cash-flow direction can make one headline return misleading.
Reading an internal rate of return carefully
IRR is the rate that makes the modeled cash flows balance in present-value terms. Enter outgoing and incoming amounts with the required signs, and select periodic or dated cash flows according to their timing. Irregular sign changes can make interpretation more difficult. Compare the cash-flow schedule and investment size alongside the rate rather than ranking projects from IRR alone.
Periodic IRR: formula and assumptions
IRR solves Σ CFₜ/(1+r)^t = 0.
IRR is per cash-flow period. Multiple sign changes can create multiple roots; this tool reports detected roots in the supported search range.
Dated money-weighted return: formula and assumptions
Solve Σ cash flow / (1+r)^(elapsed days/365) = 0.
Payments by the investor are negative; receipts are positive. Actual dates account for unequal intervals. Multiple detected annual-return solutions are reported rather than choosing an arbitrary root.
Recurring cash-flow generator: formula and assumptions
Generate the signed cash-flow series, solve periodic IRR, then compound it to an effective annual return.
A recurring contribution is negative and a distribution is positive. The terminal proceeds are added to the last period. Beginning flows start at time zero.
Worked example
Reference example currency: USD. These fixed examples do not change with your calculator preferences.
Using the Periodic IRR example:
- Cash flows
- -10000, 3000, 4000, 5000
- Discount rate for NPV (%)
- 5
IRR solves Σ CFₜ/(1+r)^t = 0.
Example result
Detected IRR: 8.9%
Net present value: $804.45
- The search may miss tangent roots. Multiple IRRs can exist; NPV at a chosen discount rate may be more useful.
These are illustrative inputs. Change the values to explore a different scenario.
Formula references
References explain the underlying methods; they do not imply endorsement or individual professional review of Finflo.
Common questions
Is every IRR result automatically an annual rate?
No. Periodic IRR uses the cash-flow interval. Dated IRR uses elapsed days with a 365-day annualization convention; recurring mode also shows annual conversion.
Can the same cash flows have more than one IRR?
Yes. Multiple sign changes can create multiple roots. The calculator reports detected solutions within its supported search range.
Prepared by Finflo. See our methodology and editorial policy. Read the relevant professional-advice limitations.