MIRR Calculator: Modified Internal Rate of Return

MIRR Calculator

Calculate the modified internal rate of return from periodic cash flows. Enter one cash flow per period, beginning at period 0. Use a finance rate to discount negative cash flows and a reinvestment rate for positive cash flows.


Use a minus sign for an investment or other outflow. Separate amounts with a new line, comma, or semicolon. Keep equal time intervals between entries.


Calculating the example…


What is MIRR?

The modified internal rate of return (MIRR) estimates a periodic return while making the financing and reinvestment assumptions explicit. Unlike a conventional IRR calculation, it discounts negative cash flows at the finance rate and compounds positive cash flows at the reinvestment rate. This produces one rate for a cash-flow series with regular, equal-length periods.

MIRR formula

MIRR = (FV of positive cash flows ÷ |PV of negative cash flows|)1/n − 1

For cash flow CFt at period t and n intervals:

  • PV of outflows = Σ [−CFt ÷ (1 + finance rate)t] for each negative cash flow.
  • FV of inflows = Σ [CFt × (1 + reinvestment rate)n − t] for each positive cash flow.
  • Take the nth root of FV inflows divided by PV outflows, then subtract 1.

Rates are entered as percentages per period. If your cash flows are annual, use annual rates and read the result as an annual MIRR. If cash flows are monthly, use monthly rates and the result is monthly. Convert a monthly result to an effective annual rate with (1 + monthly MIRR)12 − 1; do not simply multiply by 12.

Example

Suppose an investment has cash flows of −$10,000 at period 0, $3,000 at period 1, $4,000 at period 2 and $5,000 at period 3. With an 8% finance rate and an 8% reinvestment rate, PV outflows = $10,000 and FV inflows = $3,000 × 1.08² + $4,000 × 1.08 + $5,000 = $12,819.20. MIRR = (12,819.20 ÷ 10,000)1/3 − 1 ≈ 8.63% per period.

How to use the calculator

  1. Enter each cash flow in chronological order, starting at period 0. Negative amounts are investments or other cash outflows; positive amounts are receipts.
  2. Enter the finance rate used to discount outflows and the reinvestment rate used to compound inflows. Both must correspond to the interval between cash-flow entries.
  3. Select Calculate MIRR. The result reports MIRR per period, present value of outflows and future value of inflows. Reset example restores the sample values.

Limits and assumptions

  • Use 2–101 cash-flow entries (1–100 equal intervals). This tool does not infer dates or handle irregularly timed flows.
  • At least one cash flow must be negative and at least one must be positive. Zero entries are allowed.
  • Rates must be from −90% through 1,000% per period. Large inputs may still exceed the calculator's numeric range and will be rejected.
  • All amounts must use the same currency and scale. Currency labels do not affect the result.
  • MIRR is a planning metric, not a forecast or guarantee. Taxes, fees, inflation, interim distributions and changing rates are not modeled. Use matching assumptions when comparing projects.

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