XIRR Calculator
InvestmentXIRR is the single annual return that reconciles investments made on different dates with your final redemption value.
In short: XIRR (Extended Internal Rate of Return) is the annualised rate at which the net present value of a series of dated cash flows equals zero. It is the correct return measure when you invest different amounts at different times — such as a yearly investment redeemed for a final value.
Your inputs
Your inputs
- Yearly investment
- ₹1,00,000
- Number of years
- 5 yrs
- Final redemption value
- ₹7,00,000
Results
Total invested
₹5,00,000
5 yearly outflows
Final value
₹7,00,000
At redemption
Total gain
₹2,00,000
Final value − invested
XIRR
11.43%
Annualised return
Invested vs value at XIRR
Cumulative contributions against the pot grown at the derived annualised rate.
Year-wise growth at XIRR
| Year | Invested | Value | Gain |
|---|---|---|---|
| 1 | ₹1,00,000 | ₹1,11,434 | ₹11,434 |
| 2 | ₹2,00,000 | ₹2,35,609 | ₹35,609 |
| 3 | ₹3,00,000 | ₹3,73,982 | ₹73,982 |
| 4 | ₹4,00,000 | ₹5,28,176 | ₹1,28,176 |
| 5 | ₹5,00,000 | ₹7,00,000 | ₹2,00,000 |
Value curve grows each year’s contributions at the computed XIRR; the final year matches your redemption value.
How the XIRR Calculator works
Formula
- XIRR
- Annualised return (the unknown)
- CFₜ
- Cash flow in year t (investments negative, redemption positive)
- t
- Time in years measured from the first cash flow
- Σ
- Sum across every dated cash flow
Step-by-step calculation
Worked with the default values.
- 1
Cash-flow series
[−1,00,000 × 5, +7,00,000]
= 6 dated flows
- 2
Total invested
1,00,000 × 5
= ₹5,00,000
- 3
Solve NPV = 0
Find r where Σ CFₜ ÷ (1 + r)ᵗ = 0
= by iteration
- 4
Annualised return (XIRR)
r × 100
= 11.43%
How it works
- Each yearly investment is a separate negative cash flow dated to when the money went in, and the redemption is a single positive cash flow at the end.
- XIRR is the discount rate that makes the present value of all those flows net to zero — there is no closed formula, so it is found by iteration.
- Because it weights each contribution by how long it was actually invested, XIRR reflects your real return far better than a simple CAGR.
Examples
₹1,00,000 invested every year for 5 years, redeemed for ₹7,00,000
You invested ₹5,00,000 in total; XIRR works out to roughly 14% a year.
The same ₹5,00,000 total but redeemed for ₹6,00,000
XIRR falls to about 7% a year — the ₹1 lakh extra gain nearly halves the annualised return.
Understanding the XIRR Calculator
Why XIRR exists
When you invest a single lump sum and watch it grow, CAGR tells you the annual rate of growth cleanly. But almost nobody invests that way. Most people add money over time — a yearly top-up, a monthly SIP, an occasional bonus. Each rupee then stays invested for a different length of time, and a single growth rate can no longer be read off the start and end values. XIRR, the Extended Internal Rate of Return, solves exactly this problem: it finds the one annualised rate that reconciles every dated inflow and outflow with the final value.
How it works
Formally, XIRR is the rate at which the net present value of all your cash flows is zero. Investments are negative flows dated to when the money went in; the redemption is a positive flow at the end. The calculator discounts each flow back to the start and searches for the rate that makes the discounted total net to zero. There is no neat formula for this, so — like a spreadsheet's XIRR function — it iterates until it converges.
XIRR versus CAGR
The difference matters. Suppose you invest ₹1 lakh at the start of each year for five years and redeem ₹7 lakh. You have put in ₹5 lakh, so the total gain is ₹2 lakh. A naive CAGR on ₹5 lakh growing to ₹7 lakh over five years would understate reality, because most of that ₹5 lakh was invested for far less than five years. XIRR credits each contribution only for the time it was actually working, and here returns roughly 14% a year — the honest number.
What to watch for
XIRR carries the same caveats as IRR:
- It assumes interim cash is reinvested at the XIRR itself, which flatters very high rates.
- It can misbehave when cash flows switch sign more than once.
- It says nothing about scale — a dazzling XIRR on a small sum still builds a small corpus.
Used sensibly, though, XIRR is the single most useful return figure for any real investor. It is what your portfolio app quotes, what fund factsheets use for SIP returns, and the only fair way to compare investments where money went in at different times.
Pros
- Gives the accurate annualised return when you invest at multiple dates, unlike CAGR.
- Weights every contribution by how long it was actually invested.
- Directly comparable across investments, SIPs and portfolios of different shapes.
- The same measure fund houses and portfolio trackers report, so results line up with your statements.
- Handles both inflows and outflows in a single number.
Cons
- Assumes interim cash is reinvested at the XIRR itself, which can be optimistic for very high rates.
- Can be undefined or misleading when cash flows change sign more than once.
- Ignores the absolute size of the corpus — a high XIRR on a tiny sum builds little wealth.
- Sensitive to the exact dates and amounts, so small input errors move the result.
Tips
- 1Use XIRR — not CAGR — whenever you have added money in instalments rather than one lump sum.
- 2Feed in your post-tax, post-charge redemption value to see the return you actually keep.
- 3Compare a fund’s XIRR against its benchmark’s XIRR over the same dates, not against absolute returns.
- 4Remember a high XIRR on a small base still leaves you with a small corpus — check the rupee gain too.
- 5When reviewing a real portfolio, use actual transaction dates rather than assuming neat yearly flows.
Frequently asked questions
Everything you need to know about the XIRR Calculator.
What is XIRR?
How is XIRR different from CAGR?
How is XIRR different from IRR?
Why is XIRR the right measure for SIPs?
What is a good XIRR for equity mutual funds?
Can XIRR be negative?
Why does XIRR need iteration to solve?
Does XIRR account for the timing of my investments?
How does this calculator model the cash flows?
Is XIRR affected by tax and charges?
Methodology & sources
How the XIRR Calculator is calculated, and where the underlying rules come from.
How we calculate it
Every result is produced by a single, shared and tested financial-formula library used across the whole site — so the maths is consistent from one calculator to the next. Figures are estimates based on the inputs you enter and standard assumptions (such as regular compounding and constant rates); real-world outcomes vary with taxes, fees and changing rates. All calculations run in your browser — nothing you type is stored or sent to a server.
Editorial policy & disclaimer. FinCalcHub provides free educational tools and estimates — not personalised financial, tax or investment advice. Verify important decisions with a qualified professional. Read our editorial approach, disclaimer and privacy policy.
Last reviewed for accuracy on .
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