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IRR

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This function returns the internal rate of return for a series of cash flows represented by the numbers in an array.

Syntax

IRR(arrayvals,estimate)

Remarks

This function has these arguments:

Argument

Description

arrayvals

An array of numbers for which you want to estimate the internal rate of return representing payments and income occurring at regular intervals (and use positive for income and negative for payment)

estimate

[Optional] An estimate of the internal rate of return; if omitted, the calculation uses 0.1 (10 percent)

Values must contain at least one positive value (some income) and one negative value (a payment) to calculate the internal rate of return.

Remarks

This function uses the order of values to interpret the order of payments and income. Be sure to enter your payment and income values in the sequence you want with correct signs. The payments and income must occur at regular time intervals, such as monthly or annually.

If an array or reference argument contains text, logical values, or empty cells, the function ignores those values; however, the function includes in calculations cells with the value zero.

The function is calculated using an iterative technique. Starting with the estimate, this function cycles through the calculation until the result is accurate within 0.00001 (0.001 percent). If this function cannot find a result that works after 50 iterations, it returns an error.

If the function returns an error or if the result is not close to what you expected, try again with a different value for the estimate.

This function is closely related to NPV, the net present value function. The rate of return calculated by IRR is the interest rate corresponding to a 0 (zero) net present value.

For a schedule of cash flows that is non-periodic, use XIRR.

Data Types

Accepts numeric data for both arguments, the first being an array. Returns numeric data.

Examples

IRR(D1:D6)

IRR(R1C4:R6C4, -.02)

 

See Also

MIRR

NPV