Internal Rate of Return (IRR) Calculator

News: 01/25/2011 This calculator has been enhanced to allow users to optionally enter a description for each cash flow line. There are also now additional ways to insert, copy and delete or clear cash flows. So data entry will even be easier. Finally, not only can the results be printed or saved, they can now be exported to a CSV file. Registered users of this calculator and SolveIT! v6.0 will be able to get free upgrades.

The Internal Rate Of Return (IRR) will take you to the bottom line of an investment. It will calculate for you the annualized rate of return on a complicated series of cash flows. Measure this against what you can earn in a risk-free investment to determine the desirability of this investment.

In technical terms, IRR is the discount rate that sets all cash inflows and outflows to 0. More weight is given to the earlier cash flows than to the later cash flows because of the time value of money.

This calculator supports irregular length periods and exact date data entry for the cash flows. There is also no need to manually enter every cash flow. The calculator can optionally be set so that the prior entered value is used as the default value for the next period. This makes data entry a snap!

The IRR calculator is a main stay for financial planners, investors and accountants. This is the calculator that you want to use if you are calculating the annualized rate of return on your mutual fund investments, for example.

The IRR calculator was improved upon with the release of SolveIT! v6.0. It is now possible to import text files. Rather than typing in all the dates and cash flows, you can create a file with notepad for example and import your data. Some users will find this an easier way to enter data.

The IRR video discusses irr calculations and demonstrates this calculator in action.