IRR Calculator
IRR from Cash Flows
Formula
IRR is the rate r where: 0 = -Investment + CF1/(1+r) + CF2/(1+r)^2 + ... + CFn/(1+r)^n
Frequently Asked Questions
What is IRR?
IRR (Internal Rate of Return) is the discount rate that makes the net present value of all cash flows equal to zero. It represents the annualized effective compounded return rate of an investment.
How is IRR calculated?
IRR is found iteratively using methods like Newton's method. There is no closed-form solution, so the calculator uses numerical approximation to find the rate where NPV equals zero.
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