A worked example
A $1,000 investment returning $300 a year for 5 years has an IRR of roughly 15.2% — the discount rate at which those five $300 payments are worth exactly $1,000 today.
Frequently asked questions
How does IRR differ from a simple ROI?
ROI looks only at the total starting and ending amounts. IRR accounts for exactly when each cash flow happens — money returned sooner is worth more, which IRR correctly reflects and a basic ROI calculation does not.
Why might this say no rate was found?
IRR requires the cash flow series to change sign at least once — typically an outflow followed by inflows. If every flow after the initial investment is positive (or all the same sign throughout), there's no breakeven rate to solve for.
What counts as a 'good' IRR?
It depends entirely on the alternative — compare the IRR to your cost of capital, a relevant benchmark return, or what else you could realistically do with the money. There's no universal good number.
This calculator provides estimates for general informational purposes only and is not financial advice.