Internal Rate of Return (IRR)

Finance & Loans

Calculate the Internal Rate of Return (IRR) and Net Present Value (NPV) for multi-year cash flow streams to evaluate capital projects, venture investments, and real estate deals.

Calculated Result
10.485%

5 cash flows

Formula: Solve NPV(r) = 0 (Newton)

About this calculator

The Internal Rate of Return (IRR) represents the discount rate at which the Net Present Value of all future cash flows from an investment equals zero. It is widely used by venture capital, private equity, and real estate investors to benchmark project profitability.

This calculator accepts initial capital outlay and periodic net cash inflows, using the robust Newton-Raphson numerical method to determine the exact internal rate of return.

How It Works & Formula

FormulaFind r such that Ξ£ CFβ‚œ / (1+r)α΅— = 0

Solves for r in the equation: NPV = βˆ‘ [CF_t / (1 + r)α΅—] = 0. The engine iterates until the residual NPV converges to within 1e-7 precision.