DollarWise

Free IRR Calculator

October 12, 2026 · 3 min read · By the DollarWise team

How it works

Enter what you put in up front, then the cash the investment returns (or costs) in each following year. The calculator finds the internal rate of return — the discount rate that makes the net present value exactly zero — and also shows the NPV at a discount rate you choose.

IRR Calculator

The internal rate of return on any investment, worked out from its yearly cash flows.

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1 The investment

Enter it as a positive number — the calculator treats it as money going out.
Your required rate of return — often your cost of capital or an alternative investment's return.

2 Yearly cash flows

Money the investment pays you is positive; money you put in later is negative. A final sale price goes in the last year.

3 Calculate IRR & NPV

🎯 Your IRR result

🎉 Free forever. No sign-up. No credit card. No limits.

Score as many deals as you like — every calculation happens in your browser.

The formula

IRR is the rate r that solves NPV = 0, where NPV = −initial investment + Σ cash flow in year t ÷ (1 + r)^t. There is no direct algebraic solution, so the calculator uses bisection: it evaluates NPV at −99% and at 1000%, confirms the sign changes between them, then halves the interval 200 times until the rate is pinned down to full precision. If NPV has the same sign at both ends, no single IRR exists for those cash flows and the calculator says so instead of guessing.

Everyday uses

  • Rental property deals: enter the purchase price, yearly net rent, and the expected sale price in the final year to score a deal in seconds.
  • Business projects: compare two projects with different cash-flow shapes on one equal footing — the higher IRR usually wins.
  • Equipment purchases: weigh a machine’s cost against the yearly savings and income it generates.
  • Startup and side-hustle checks: see what return your money in actually has to beat before an opportunity is worth it.

Frequently asked questions

What is a good IRR?

It depends on the risk. A common rule of thumb: the IRR should comfortably beat a safe alternative (like Treasury bonds) and your own required return. Many investors look for 12–20%+ on riskier private deals, while stable real estate often lands in the high single digits.

Why can some cash flows have no IRR — or several?

IRR exists when NPV crosses zero. If every cash flow after the initial investment is positive, NPV crosses exactly once. If cash flows flip sign more than once (for example, a big cost in the final year), NPV can cross zero multiple times, giving several valid IRRs — in those cases, NPV at your discount rate is the more reliable guide.

What is the difference between IRR and NPV?

IRR is a percentage — the break-even rate of return. NPV is a dollar amount — how much value the investment creates above your required return, in today’s dollars. Use IRR to compare efficiency, NPV to compare actual value created.