Payback Period Calculator for Irregular Cash Flows

Initial Investment ($)

Discount Rate

Cash Flow ($)

Year 1

Year 2

Year 3

Year 4

Year 5

Year 6

Year 7

Year 8

Year 9

Calculation Results

Payback Period

Discounted Payback Period

Cash Flow Return Rate

Detailed Cash Flow Analysis


Time	Cash Flow	Net Cash Flow	Discounted Cash Flow	Net Discounted Cash Flow

How to Use This Calculator

Step-by-Step Instructions

Enter Initial Investment: Input the total amount of money you're investing upfront (in USD).
Set Discount Rate: Enter the discount rate as a percentage. This represents your required rate of return or cost of capital.
Input Cash Flows: Enter the expected cash returns for each year. You can:
- Modify existing year values
- Add more years using the "Add More Years" button
- Delete unnecessary years using the "Delete" button
Calculate: Click "Calculate Payback Period" to see your results.

Understanding Your Results

Payback Period

The time it takes to recover your initial investment using nominal cash flows (not adjusted for time value of money).

Discounted Payback Period

The time it takes to recover your initial investment using discounted cash flows (adjusted for time value of money). This is typically longer than the simple payback period.

Cash Flow Return Rate (IRR)

The internal rate of return - the discount rate that makes the net present value of all cash flows equal to zero. Compare this to your required rate of return.

Detailed Cash Flow Analysis Table

Cash Flow: The actual cash received each year
Net Cash Flow: Cumulative cash flow over time
Discounted Cash Flow: Present value of each year's cash flow
Net Discounted Cash Flow: Cumulative discounted cash flow

Financial Formulas Used

Simple Payback Period

Payback Period = Initial Investment ÷ Average Annual Cash Flow

The simple payback period calculates how long it takes to recover the initial investment without considering the time value of money.

Discounted Payback Period

Discounted Cash Flow = Cash Flow ÷ (1 + Discount Rate)^n
Where n = number of years

The discounted payback period accounts for the time value of money by discounting future cash flows to their present value.

Internal Rate of Return (IRR)

NPV = Σ [Cash Flow_t ÷ (1 + IRR)^t] = 0
Where t = time period and NPV = Net Present Value

IRR is the discount rate that makes the net present value of all cash flows equal to zero.

Payback Period Calculator for Irregular Cash Flows