# Internal Rate of Return Calculator

The internal rate of return calculator facilitates the tricky calculation of IRR, as the concept of IRR is widely used for evaluating investments. IRR is a technique of discounting cash flows for analyzing investment decisions. It is the discount rate at which the net present value of the project is’ 0 ‘, which means that the discounted future cash inflows of the project are equal to the total cash outflows of that project.

In order to calculate IRR, consider the following formula:

where a = lower rate of return

b = higher rate of return

NPVa =NPV at lower rate

& NPVb = NPV at higher rate.

## How to Calculate using Calculator?

The user must provide the calculator with the following data to obtain immediate results.

Lower rate of return – The lower the rate of return, the higher the net present value.

Higher rate of return – Similarly, the higher the rate of return, the lower the net present value.

NPV at lower rate – It is the net present value calculated at the lower interest rate.

NPV at higher rate – It is the net present value that is calculated with a higher rate of return.