IRR, MIRR and XIRR calculator

What the internal rate of return means

The internal rate of return is the single discount rate that makes the present value of all the money coming in equal to the present value of all the money going out. In other words, it is the yearly (or per-period) return that the project itself earns on the money tied up in it. You compare it with the return you could get elsewhere, or with what the money costs you. The calculator has two modes: a list of cash flows at equal intervals, and a list of dated cash flows for payments that come when they come.

How the rate is found

There is no direct formula, because the rate sits inside every term of Σ Cₜ ÷ (1 + r)ᵗ = 0, where Cₜ is the cash flow in period t. The calculator scans the whole range of rates from −99.9% upward, marks every place where the NPV changes sign, and narrows each one by bisection, which is far less likely to land on only one of several answers than a Newton search from one starting guess (very close roots can still be missed). In dated mode t is the number of days since the first date divided by 365, the convention in the Microsoft documentation of XIRR.

MIRR follows Excel's definition: the money paid out is discounted to period 0 at the finance rate, the money received is compounded to the last period at the reinvestment rate, and MIRR = (terminal value ÷ present value of outlays)^(1 ÷ n) − 1 for n periods. OpenStax's Principles of Finance presents the same idea as a cure for two problems of IRR: it implicitly assumes inflows are reinvested at the IRR itself, and it may have several solutions.

Worked examples

Periodic: an outlay of $120,000 followed by $39,000, $30,000, $21,000, $37,000, $46,000 gives an IRR of 13.07%. With a finance rate of 10% and a reinvestment rate of 12%, the MIRR is 12.61%; Microsoft's documentation of MIRR shows 13% for these figures. Using only the first three years of returns, the MIRR is -4.80%, which the same page shows as −5%.

Dated: Microsoft's XIRR example pays $10,000 on 2008-01-01 and receives $2,750 on 2008-03-01, $4,250 on 2008-10-30, $3,250 on 2009-02-15, $2,750 on 2009-04-01. The XIRR is 37.34%, and the Microsoft page lists 0.373362535. The default values of the dated mode are these same rows.

Limits of the method

Several IRRs: a series that changes sign more than once, such as an outlay, then profits, then a closing cost, may have no IRR at all, one, or several. The warning in the result shows how many were found. Reinvestment: IRR quietly assumes that every inflow is reinvested at the IRR, which is optimistic for a very high one; MIRR makes the assumption explicit. Scale: IRR ignores how much money is invested, so a small project can beat a large one. Timing of the dated mode: payments on the same day are simply added, and a leap year counts as 365 days, as in Excel.

All of these results are only as good as the cash-flow forecast. A single-point IRR such as 'about 23%' hides the range of reasonable outcomes; rerun the calculation with lower returns and later dates before you rely on it.

What is the difference between IRR, XIRR and MIRR?

IRR assumes the cash flows come at equal intervals and returns the rate per interval at which the net present value is zero. XIRR takes a date for each flow, so it handles irregular payments, and returns an annual rate on a 365-day year. MIRR avoids two weak points of IRR: it discounts the money you pay out at a finance rate, compounds the money you receive at a reinvestment rate, and gives a single answer. On the same flows (−$120,000, $39,000, $30,000, $21,000, $37,000, $46,000) the IRR is 13.07%, while the MIRR at 10% and 12% is 12.61%.

Why is my spreadsheet answer slightly different?

Check the rules each function uses. Excel's XIRR counts days from the first date and divides by 365, which is what this calculator does, and it needs a positive and a negative value. XIRR also searches from a starting guess (10% by default) and gives up with #NUM! if it does not converge in 100 tries. When a series has several IRRs, a spreadsheet returns the one it reaches first, which may not be the lowest. Here the lowest rate is shown and the others are listed.

Can a project have more than one IRR?

Yes. The number of rates at which the NPV is zero can be at most the number of sign changes in the cash flows (Descartes’ rule of signs). The flows −100, 230, −132 change sign twice and have two IRRs: 10.00% and 20.00%. In practice that happens with projects that need a big outlay at the end, such as a mine with a cleanup cost or a lease with a restoration payment. The calculator counts the sign changes, finds every rate it can, and warns you. Use NPV at your own required rate, or MIRR, instead.

What is a good IRR?

An IRR is good when it is above the return you require for a project of that risk, and the comparison must be made on the same basis (annual against annual). It tells you nothing about size: a 40% IRR on $1,000 adds less than a 15% IRR on $100,000. Banks, investors and companies each use their own hurdle rate, so there is no universal threshold to quote.

How do I turn a monthly IRR into an annual rate?

Compound it: annual = (1 + monthly)^12 − 1. For a $1,000 outlay followed by twelve monthly payments of $90, the monthly IRR is 1.20%, which is 15.45% a year after compounding; multiplying by 12 would give 14.45%, a different (nominal) figure. The dated mode does the conversion for you because it always returns an annual rate.

Should I rank projects by IRR or by NPV?

When projects compete for the same money, NPV at your required rate measures the value created in dollars, while IRR is only a rate. Take two investments of 100: A returns 60, 60, 60 and B returns 20, 40, 130. The IRR of A is 36.31% against 29.05% for B, yet at 5% the NPV of A is $63.39 and the NPV of B is $67.63. The ranking depends on the rate, which the IRR hides.

Sources, checked October 28, 2026: Microsoft Support, XIRR function (365-day year, search limits, example) and MIRR function (syntax, example); OpenStax, Principles of Finance, section 16.4 “Alternative Methods” (MIRR steps; IRR may have multiple solutions). Related: NPV calculator, payback period calculator, ROI calculator, WACC calculator and present value calculator.

Estimates for planning only — not financial, tax or legal advice. Your own forecasts, contracts and advisers decide. How we check our calculators.