Internal rate of return
Spending 1,000 to receive 300, 400, 500 and 300 over four years is an internal rate of return of 18.03%. That is the discount rate at which the whole series is worth zero today. Where the cash flows change sign more than once there is more than one such rate, and this refuses to answer rather than picking one — several calculators will hand you the first root they find.
Paste a column of cash flows and read the rate at which they break even, beside net present value at your own hurdle rate. It refuses to answer where no single rate exists — a series that changes sign twice has several, and picking one would be a guess dressed as arithmetic.
Method checked against the published discounting conventions · How we check
Internal rate of return
16.36%
Above your 8% hurdle, so the project earns more than the alternative — by 8.36 percentage points.
- Periods entered
- 6
- Total out
- -$25,000
- Total back
- $40,000
- NPV at your hurdle rate
- $6,329
- NPV at the IRR
- -$0
- Sign changes
- 1 — one root, so one answer
The NPV at the IRR is zero by definition — it is printed because a figure that is not zero would mean the solver had not converged, and you should be able to see that.
Questions people actually ask
- What is a good IRR?
- One above what the money would otherwise earn, which is why the hurdle rate is on this page. In isolation an IRR is uninterpretable: 15% is excellent for a bond portfolio and poor for early-stage equity. The comparison is the decision, not the number.
- What is the difference between IRR and NPV?
- IRR is a rate and NPV is an amount. IRR answers "what return does this earn"; NPV answers "does this make me richer at my cost of capital". IRR prefers small quick projects because a percentage ignores scale, so where the two disagree, NPV is the one to follow.
- Why does my cash flow have no IRR?
- Because it never changes sign. A rate that breaks even only exists if money goes out and comes back — a series that is all inflows is worth more at every discount rate and never crosses zero. This page says so rather than returning a figure.
- Can a cash flow have more than one IRR?
- Yes, and it is the classic trap. A series that changes sign more than once — an outlay, returns, then a large closing cost — is a polynomial with several roots, and each is a rate at which NPV is zero. No single figure is "the" IRR, so this page refuses to pick one and points at NPV instead.
- How is IRR calculated?
- By solving NPV = 0 for the rate, which has no algebraic solution beyond simple cases. This page brackets the root and bisects 200 times, which cannot diverge — unlike the Newton iteration most spreadsheets use, which fails on flat derivatives and is why Excel sometimes returns #NUM. The NPV at the answer is printed so you can see it really is zero.
Cite this page
- APA
- Rule Calculator. (2026). IRR Calculator. Rule Calculator. https://rulecalculators.com/irr
- MLA
- "IRR Calculator." Rule Calculator, August 16, 2026, https://rulecalculators.com/irr.
- Chicago
- Rule Calculator. "IRR Calculator." Rule Calculator. Last reviewed August 16, 2026. https://rulecalculators.com/irr.
The date is when the figures on this page were last checked against their source, not the day you opened it. Add your own access date if your style needs one.
Sources
- SEC investor.gov — bonds, how price and yield move against each other
- TreasuryDirect — how Treasury auction prices, yields and coupons relate
- NIST Handbook 135 — discounting and present-value methodology
Arithmetic on the figures you enter, not investment advice.