How the XIRR Calculator Works
Add a row for every cash flow: the date it occurred and the amount. Use negative amounts for money you invested (outflows) and positive amounts for money you received back (inflows, redemptions, or the current value of your holding if you were to sell today).
The calculator finds the single annualized rate of return that, when used to discount every cash flow back to a common date, makes the total net present value equal to zero — this is the mathematical definition of XIRR.
Because there's no simple algebraic formula for XIRR, it's solved numerically (using the Newton-Raphson method, with a bisection fallback), the same approach spreadsheet XIRR functions use internally.
Formula Used
XIRR is the rate r that satisfies:
Σ [ CFᵢ ÷ (1 + r)^(daysᵢ / 365) ] = 0- CFᵢEach individual cash flow (negative for outflows, positive for inflows)
- daysᵢNumber of days between that cash flow's date and the earliest cash flow's date
- rThe annualized rate of return being solved for (this is XIRR)
Example Calculation
A textbook example with five irregular cash flows.
- 1 Jan 2008-₹10,000 (investment)
- 1 Mar 2008+₹2,750
- 30 Oct 2008+₹4,250
- 15 Feb 2009+₹3,250
- 1 Apr 2009+₹2,750
- ResultXIRR ≈ 37.3%
Important Assumptions
- XIRR annualizes returns based on the exact number of days between cash flows using a 365-day year — this can produce unintuitively high or low annualized figures for very short holding periods, since small absolute gains get scaled up dramatically when annualized.
- Cash flow patterns with multiple changes in sign (e.g. investing, partially withdrawing, then investing again repeatedly) can mathematically have more than one valid XIRR solution. This calculator returns one such solution found via standard numerical methods, which is usually the economically meaningful one for typical investment patterns.
- To evaluate an ongoing investment (like SIPs still running), include a final positive cash flow equal to the current market value of your holding, dated today, to see your annualized return so far.