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.
Internal Rate of Return Calculator
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.
