IRR Calculator
Calculate Internal Rate of Return & Profitability.
₹
The amount you are investing today.
%
Minimum return you expect from this investment.
Expected Returns (Profit)
Start Calculation
Enter investment and expected returns.
0.00%
Project Details
Hurdle Rate
0.00%
NPV (Net Value)
₹ 0
What is IRR (Internal Rate of Return)?
The Internal Rate of Return (IRR) is a way to measure how profitable an investment is. Think of it as the "interest rate" your investment is earning annually.
If you invest ₹1 Lakh today and get back ₹20,000 every year for 5 years, the IRR tells you what annual percentage return that equals.
The Decision Rule
- If IRR > Hurdle Rate: Generally ACCEPT. The project is expected to earn more than your minimum requirement.
- If IRR < Hurdle Rate: Generally REJECT. The project may not be worth the risk.
How is IRR Calculated?
IRR is found by solving the NPV equation for r when NPV equals zero:
0 = CF₀ + CF₁/(1+r)¹ + CF₂/(1+r)² + ... + CFₙ/(1+r)ⁿ
Since there is no direct formula to solve for r, this calculator uses numerical methods to find the exact rate instantly.