Calculate the internal rate of return from a series of cash flows. Free irr calculator with the formula shown - runs entirely in your browser, no signup.
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Calculate the internal rate of return from a series of cash flows. Free irr calculator with the formula shown - runs entirely in your browser, no signup.
Four guesses bracket the IRR at 21.64%.
Transparent methodology
How this calculator works
Reviewed August 2026 · BoringToolsKit Editorial Team
Formula
IRR is the discount rate r where Σ cash_flow_t ÷ (1+r)^t = 0.
BoringToolsKit. “IRR Calculator.” boringtoolskit.com/irr-calculator/ (reviewed August 2026). Free to reference in articles, syllabi, and answer posts with a link.
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Worked example: solving the IRR by hand
Suppose you invest $1,000 today and receive $400 after year 1, $500 after year 2, and $600 after year 3. IRR is the rate r where NPV hits zero: -1000 + 400/(1+r) + 500/(1+r)^2 + 600/(1+r)^3 = 0. There is no closed-form solution for three periods, so you iterate, exactly as the calculator's bisection loop does.
Guess r = 20% (divide by 1.2): 400/1.2 = 333.33, 500/1.44 = 347.22, 600/1.728 = 347.22. Sum = 1,027.78, so NPV is +$27.78 and the true rate is higher. Guess r = 22%: 400/1.22 = 327.87, 500/1.4884 = 335.93, 600/1.815848 = 330.42. Sum = 994.22, NPV is -$5.78. The root sits between 21% and 22%.
Bisect: at r = 21.6%, the discounted inflows are 328.95 + 338.14 + 333.77 = 1,000.86; at r = 21.65% they total 999.90. The zero crossing lands at about r = 21.645%, which the tool reports as 21.64%. The supporting metrics would show $1,500 total inflows, $1,000 initial outlay, and a $500 net gain over three years, an undiscounted return the IRR compresses into one annualized rate.
Edge cases the bisection method cannot rescue
The algorithm scans rates from -99% up to 100,000% doubling the upper bound while the NPV signs match, so it finds only the first sign change. A project with flows like -1,000, +2,300, -1,320 (an outflow, inflow, outflow) changes sign twice and mathematically has two IRRs, about 10% and 20%; the calculator returns 'No unique IRR' rather than picking one, which is the honest answer.
Scale and timing matter more than the IRR headline suggests. Flows of -100, +130 after one year and -1,000, +1,300 after one year both produce a 30% IRR, but the second earns $300 versus $30. IRR also assumes you can reinvest interim cash at the IRR itself; at 21.64% that assumption is optimistic, which is why a $500 net gain on $1,000 annualizes to 21.64% only while every dollar stays compounding at that rate.
The parser strips currency symbols, commas, and whitespace from each line and silently skips malformed rows, so a typo like '40O' with a letter O is dropped rather than flagged. With fewer than two valid flows left, you get the 'at least two cash flows' error instead of a number. Also note the tool treats year 0 as the first line by convention; a positive first flow plus all-negative later flows will fail the outflow-first check.
