XIRR for irregular flows.

XIRR (Extended Internal Rate of Return) calculates IRR for irregular cash flows. Standard IRR assumes equal-period flows; XIRR handles real-world dates with arbitrary timing. Used for SIP calculations, real estate cash flows, business investments where contributions/withdrawals don't follow regular schedule.

Example: invested 10k initial, then received 2k year 1, 3k year 2, 4k year 3, 3k year 4, 8k year 5. Total received: 20k on 10k invested = 2x MOIC. XIRR: ~25% annualised. Captures both magnitude (10k profit) and timing (early returns weighted heavier in IRR calculation).

XIRR vs simple IRR: simple IRR uses fixed periods (annual), XIRR allows any dates. XIRR more accurate for real-world investments with mid-year contributions or distributions. Excel XIRR function widely used in PE, VC, real estate analysis. Limitation: same as IRR - assumes reinvestment at IRR rate. For comparison across investments use XIRR (handles timing differences). For absolute wealth measurement use MOIC.

Quick example

With initial investment of 10,000 and year 1 cash flow of 2,000 (plus year 2 cash flow of 3,000 and year 3 cash flow of 4,000), the result is 22.65%. Change any figure and watch the output shift — it's often more useful to see the pattern than to memorise the formula.

Which inputs matter most

You enter Initial Investment, Year 1 Cash Flow, Year 2 Cash Flow, Year 3 Cash Flow, and Year 4 Cash Flow. Not every input has equal weight. Flip one at a time toward extreme values to feel which ones move the needle most for your situation.

What's happening under the hood

XIRR solved iteratively (bisection) - rate making NPV of all cash flows = 0. The formula is listed in full below. If the number looks off, you can retrace the calculation by hand — that's the point of showing the working.

Why investors run this

Most people's intuition for compounding is wrong — not because the math is hard, but because linear thinking doesn't account for curves. Running numbers through a calculator like this one is the cheapest way to recalibrate that intuition before making an irreversible decision about contribution rate, asset mix, or retirement age.

What this doesn't capture

Steady-rate math ignores real-world volatility. Actual returns are lumpy; sequence-of-returns risk matters most in drawdown; fees and taxes drag on compound growth; and behaviour changes in drawdowns can reduce outcomes below the projection. Treat the number as one scenario, not a forecast.