Finance
IRR Calculator
Find the discount rate that makes NPV zero. Enter your initial investment and per-period cash flows; bisection solves for the IRR in 200 steps.
Cash flow details
Treated as a negative cash flow at period 0.
Period 1
Period 2
Period 3
Period 4
Positive values are inflows, negative values are outflows.
Internal rate of return
21.86%
Periodic rate: 21.8623% per period
Converged in 27 iterations with NPV at IRR = $0.00 (target: $0).
NPV at 0% discount
$600.00
NPV at IRR
$0.00
Converged
Yes
Frequently Asked Questions about the IRR Calculator
What does IRR actually measure?
IRR is the per-period discount rate that drives NPV to zero. A higher IRR means the project earns more per dollar of capital. Investors typically accept projects whose IRR exceeds their required return.
How does this calculator find the IRR?
It uses bisection on the per-period rate over -99% to 1000%. At each step it computes NPV at the midpoint, then narrows the bracket toward whichever side changes sign. Tolerance is 1e-7 with up to 200 iterations.
Can you walk through a concrete example?
Invest $1,000 today and receive $400 at the end of each of the next four years. The IRR is roughly 21.86%. A $1,000 deposit earning 21.86% compounded annually would produce the same four $400 payments before going to zero.
Why might no IRR exist?
If every cash flow after the initial investment shares the same sign as the outlay, NPV never crosses zero and no real discount rate solves the equation. The calculator detects this and reports No IRR found.
What about projects with multiple IRRs?
When cash flows alternate sign more than once, the NPV curve can cross zero at several rates. Bisection still returns one valid root, but the calculator flags the warning. NPV at an explicit discount rate is more reliable for those.