IRR function
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IRR
Calculates the internal rate of return of a series of cash flows.
Syntax:
IRR(payments; guess)
- payment is a range containing the payments made or received, at regular intervals.
- guess (optional, defaults to 10%) is a first guess at the rate.
- IRR iterates to find the rate of return which gives a zero net present value for the cash flows. At least one of the cash flows must be negative and at least one positive - to allow the net present value to be zero. The rate of return is per period, and interest is compounded each period.
- The payments are assumed to arise at the start of each period; the order in which the payments are given is important.
Example:
IRR(A1:A4)
- where A1:A4 contain -5000, 1000, 2000, 3000, returns approximately 8.21%.
Issues:
- This function does not currently accept arrays.
See Also