Frequently Asked Questions

What is IRR and how is it calculated?

IRR (Internal Rate of Return) is the discount rate that makes the Net Present Value (NPV) of all cash flows equal to zero. It's calculated by finding the rate 'r' where:

NPV = ∑(Cash Flow_t / (1 + r)^t) = 0

Our calculator uses the Newton-Raphson method to solve this equation iteratively. Learn more in our step-by-step IRR calculation guide.

Are your calculators really free?

Yes! All our financial calculators are completely free to use with:

• No registration required
• No hidden fees
• No credit card needed
• No usage limits

We believe everyone should have access to professional-grade financial analysis tools.

Can I use these calculators for business decisions?

While our calculators provide accurate results using industry-standard formulas, they should be used as decision-support tools, not as the sole basis for major financial decisions. We recommend consulting with a qualified financial advisor for significant investment or business decisions.

What's the difference between IRR and XIRR?

IRR assumes equal time periods between cash flows (e.g., monthly or yearly).

XIRR handles irregular cash flow dates and calculates annualized returns based on actual dates.

When to use:

• Use IRR for regular investments (monthly contributions, annual dividends)
• Use XIRR for real-world scenarios with irregular transactions

Our Advanced IRR Calculator supports both modes. Learn more in our XIRR guide.

How do I interpret IRR results?

An IRR greater than your required rate of return or cost of capital indicates a potentially profitable investment.

Example: If your IRR is 12% and your cost of capital is 8%, the investment may be worth pursuing (12% > 8%).

Important: Always consider IRR alongside other metrics like NPV, payback period, and risk assessment.

What is a good IRR percentage?

A "good" IRR depends on your industry, risk tolerance, and cost of capital:

• 10-15%: Acceptable for most standard investments
• 15-20%: Good returns, above average
• 20%+: Excellent, indicates high-performing investment

Industry benchmarks:

• Real estate typically targets 15-20%
• Private equity seeks 20-25%
• Venture capital may target 25%+

How accurate are your IRR calculations?

Our IRR calculator uses the Newton-Raphson iterative method with a precision of 0.0001% (6 decimal places). This is the same method used by:

• Microsoft Excel's XIRR function
• Google Sheets XIRR
• Professional financial modeling software

Results are highly accurate for standard investment scenarios with convergent solutions.

What's the difference between IRR and ROI?

ROI (Return on Investment) is a simple percentage showing total return:

ROI = (Gain - Cost) / Cost × 100%

IRR (Internal Rate of Return) is more sophisticated:

• Accounts for the time value of money
• Handles multiple cash flows over time
• Provides annualized rate of return

Use ROI for simple, single-period investments. Use IRR for multi-period investments. Read our detailed ROI vs IRR comparison.

Should I use IRR or NPV?

Use both for comprehensive investment analysis:

NPV (Net Present Value):

• Shows dollar value added
• Better for comparing different-sized projects
• Requires you to specify discount rate

IRR:

• Shows percentage rate of return
• Easier to compare across different investments
• Automatically calculates the rate

Learn more in our IRR vs NPV guide.

Do you store my data?

No. All calculations are performed locally in your browser. We do not store, save, or transmit your financial data to our servers. Your inputs and results remain completely private.

Can I export my calculation results?

Yes! Many of our calculators include:

• Copy button to copy results to clipboard
• Share button to generate shareable links
• Browser print function for PDF export

Do your calculators work on mobile devices?

Yes! All our calculators are fully responsive and work seamlessly on:

• Smartphones (iOS & Android)
• Tablets
• Desktop computers
• All modern web browsers