Returns
XIRR, explained
Enter dated cash flows and watch the annual return that balances them appear — step by step.
XIRR
Newton’s method9.32%
Annualised return that accounts for when each rupee moved.
- Invested
- ₹2,00,000
- Received / value
- ₹2,65,000
- Gain
- ₹65,000
Where the NPV crosses zero
Step by step
- List every cash flow with its date. Money you invested counts as negative (−₹2,00,000 in total); money you received, or the value today, counts as positive (₹2,65,000).
- Measure each date’s distance from the first one in years (days ÷ 365). These flows span 4 years.
- Pick a trial annual rate r and discount each flow back to the first date: amount ÷ (1 + r)^years. Add them up — that total is the net present value (NPV).
- At 4.32% the NPV is ₹30,970. Raising the rate shrinks later receipts, so the NPV falls.
- XIRR is the rate where the NPV is exactly zero. Here it is 9.32% a year (NPV at that rate ≈ ₹0), found by Newton’s method in 3 steps.
- Compare: the simple (absolute) return is 32.5% in total. XIRR annualises it and accounts for when each rupee went in and came out.
- Cash flows used
- 5
- First date
- 4 Oct 2022
- Last date
- 4 Oct 2026
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01Method
How this is calculated
The same formulas run on the server and in your browser, documented in plain language. Every assumption is shown beside the result and you can change it.
- Default assumptions reviewed
- 4 Oct 2026
- Formula version
- 1.0.0
Money invested is negative; money received, or the value today, is positive. Each date is measured in years from the first one (days ÷ 365).
Each flow is discounted back to the first date at a trial annual rate and the results are added up.
NPV(r) = Σ amount ÷ (1 + r)^(days ÷ 365)
XIRR is the rate that makes the NPV exactly zero. It is found with Newton’s method, falling back to a bracketed search when needed. Unusual patterns of flows can have no solution, or more than one.
Default assumptions are hypothetical round numbers chosen for illustration. They are not forecasts and not a view on any product. Change them to see how sensitive the result is.
02Questions
Good to know
More about how our tools work: all tool questions.
03Keep exploring
Understand first. Invest second.
Terms to know
- XIRRAn annualised return for investments with several cash flows on irregular dates, such as SIPs, top-ups and partial withdrawals.
- CAGRThe steady yearly growth rate that would take an investment from its starting value to its ending value over a given period.
- SIPA way to invest a fixed amount in a mutual fund at regular intervals, usually monthly, instead of investing everything at once.
- BenchmarkThe index a fund’s performance is measured against, chosen to represent the market or segment the fund invests in.
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