XIRR Calculator - Calculate Internal Rate of Return
Free XIRR calculator to determine the internal rate of return for investments with irregular cash flows and dates
XIRR Calculator
Results
How to Use This Calculator
Enter Cash Flows
Add your investment dates and amounts (negative for investments, positive for returns)
Use Negative Values
Enter investments as negative numbers (money going out)
Use Positive Values
Enter returns as positive numbers (money coming in)
Enter Accurate Dates
Use the actual dates when cash flows occurred
Add All Cash Flows
Include all investments and withdrawals during the period
Click Calculate
The calculator will determine your XIRR percentage
Understanding XIRR
XIRR (Extended Internal Rate of Return) is a financial metric used to calculate the annualized return on investments with irregular cash flows. Unlike standard IRR, XIRR accounts for cash flows that occur on different dates.
What is Internal Rate of Return?
IRR is the discount rate that makes the net present value (NPV) of all cash flows equal to zero. It represents the expected compound annual rate of return for an investment.
What is XIRR?
XIRR extends the IRR concept to handle cash flows that occur on irregular dates. It's particularly useful for investments like mutual funds, stocks, or real estate.
When to Use XIRR
Use XIRR for stock market investments with irregular buying/selling, mutual fund SIPs with varying dates, real estate investments, or business investments with irregular funding rounds.
For investors seeking to evaluate the compound annual growth rate of their investments over time, our CAGR Calculator provides a straightforward way to calculate the smoothed annual return, helping you understand long-term investment performance.
If you're interested in how compound interest affects your savings or investments, you can explore our Compound Interest Calculator to see how your money grows over time with regular compounding.
To assess the profitability of your investments relative to the initial amount invested, try our Return on Investment Calculator, which helps you determine the efficiency of different investment opportunities.
Understanding Your Results
The XIRR calculator provides key insights into your investment performance. Understanding these numbers helps you evaluate and compare investment opportunities.
Internal Rate of Return (XIRR)
This is the annualized return on your investment, accounting for the timing of all cash flows. A higher XIRR indicates better performance.
Total Investment
This represents the total amount you've invested in the asset (sum of all negative cash flows).
Total Returns
This is the total amount you've received from the investment (sum of all positive cash flows).
Net Gain/Loss
This shows your profit or loss (Total Returns - Total Investment). Positive indicates profit, negative indicates loss.
Important Considerations and Limitations
While XIRR is a powerful tool for evaluating investment performance, it has important limitations that you should understand.
1. Reinvestment Assumption
XIRR assumes that all returns are reinvested at the same XIRR rate, which may not reflect real-world conditions.
2. Doesn't Account for Inflation
XIRR shows nominal returns without adjusting for inflation. Real returns may be significantly lower.
3. Risk Not Considered
XIRR doesn't account for the risk associated with an investment. Higher XIRR might come with higher risk.
4. Requires Accurate Data
XIRR accuracy depends on accurate cash flow amounts and dates. Missing data will produce misleading results.
Real-World XIRR Examples
📈 Mutual Fund SIP
Jan 2022: Invest $5,000
Jan 2023: Invest $5,000 (balance: $11,200)
Jan 2024: Invest $5,000 (balance: $18,500)
Jan 2025: Portfolio value: $24,300
XIRR: 12.4% annual return
🏢 Real Estate Investment
Year 0: Buy property for $200,000
Years 1-5: Collect $20,000 annual rent
Year 5: Sell for $250,000
XIRR: 8.7% including rental income
💼 Private Investment
2020: Invest $50,000 in startup
2022: Additional $30,000 investment
2024: Exit value: $180,000
XIRR: 34.2% annual return (high volatility)
When to Use XIRR vs CAGR
✓ Use XIRR When:
- Multiple investments at different times
- Withdrawals or income distributions
- Irregular cash flows (rent, dividends)
- Real estate or business investments
- You want most accurate return picture
✓ Use CAGR When:
- Single lump sum investment
- Fixed start and end dates
- No interim cash flows
- Comparing investments simply
- Easier to understand metric needed
💡 XIRR Pro Tips
Include all cash flows: Don't forget dividends, distributions, or withdrawals - these significantly impact XIRR.
Use consistent currency: Convert all amounts to same currency before calculating XIRR.
Account for timing: Cash flows timing matters greatly. One month delay can change XIRR significantly.
Compare with benchmarks: Check if XIRR beats inflation and comparable investments in same asset class.
Frequently Asked Questions (FAQ)
Q: What is XIRR and how is it different from IRR?
A: XIRR (Extended Internal Rate of Return) is used for cash flows that occur at irregular intervals, while IRR assumes regular periodic cash flows. XIRR is more flexible and accurate for real-world investments.
Q: What is a good XIRR for investments?
A: A good XIRR depends on the type of investment and market conditions. For stock market investments, 8-12% is considered good. Compare your XIRR to relevant benchmarks.
Q: How do I interpret a negative XIRR?
A: A negative XIRR indicates that your investment has lost money overall. This means your cash outflows exceed your cash inflows in present value terms.
Q: Can XIRR be greater than 100%?
A: Yes, XIRR can exceed 100%, indicating extremely high returns. For example, investing $1,000 and receiving $3,000 after one year would yield 200% XIRR.
Q: What are the limitations of XIRR?
A: XIRR limitations include: assumes reinvestment at same rate, doesn't account for inflation or risk, requires accurate data, and can have multiple solutions in complex cases.
Q: How accurate are XIRR calculations?
A: XIRR calculations are mathematically accurate for the given inputs, but actual investment performance may vary due to market conditions and other factors.