XIRR Calculator

XIRR (Extended Internal Rate of Return) is the version of IRR built for cash flows landing on real calendar dates rather than neat equal periods. The full method handles arbitrary timing, which is why it is used for SIP plans, real estate cash flows, and business investments where contributions and withdrawals don't follow a regular schedule. This calculator uses a simplified version: five annual cash flows treated as arriving at year-end, so it illustrates the concept and gives a quick estimate rather than exact-date precision.

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: about 23% 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, Year 4 Cash Flow, and Year 5 Cash Flow. Not every input has equal weight. Adjusting one input at a time toward extreme values shows which ones move the result most.

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 run this

Running the numbers makes the trade-offs concrete. Small changes in the inputs can move the result more than intuition suggests, which is hard to judge without working it out.

What this doesn't capture

This is a simplified model that holds its assumptions constant. Real outcomes vary with market conditions, costs, taxes, and timing, so the figure is best read as one scenario rather than a forecast.