MIRR Calculator
Compute the modified internal rate of return for any cash flow series. Paste comma- or space-separated cash flows in dollars (negative = money out, starting with the initial investment at time 0) and set a finance rate and reinvestment rate in percent.
Example: with Cash flows, time 0 first (negative = outflow) -120000, 39000, 30000, 21000, 37000, 46000 · Finance rate on outflows (%/period) 10 · Reinvestment rate on inflows (%/period) 12 → MIRR: 12.61% per period.
- Future value of inflows$217,297 (inflows compounded at 12.0%)
- Present value of outflows$120,000 (outflows discounted at 10.0%)
- Timeline5 periods, 6 cash flows
Computed by the calculator below using its default values. Change any input to see your own numbers.
MIRR = (FV of positive flows at the reinvestment rate ÷ PV of negative flows at the finance rate)^(1/n) − 1 — the same definition Excel's MIRR() uses.
What MIRR fixes about IRR
Plain IRR quietly assumes every interim cash flow is reinvested at the IRR itself — a 40% IRR project supposedly reinvests its payouts at 40%, which almost never reflects reality. MIRR replaces that with two honest rates: inflows compound forward to the end at your reinvestment rate (what idle cash actually earns), and outflows discount back to time zero at your finance rate (what capital actually costs). One n-th root later, you have a single, defensible periodic return.
MIRR also solves IRR's multiple-roots problem. When cash flows flip sign more than once (invest, receive, reinvest, receive), the IRR polynomial can have several answers or none; MIRR always produces exactly one, because it collapses everything into one future value and one present value.
In the worked default — a $120,000 investment returning $39,000, $30,000, $21,000, $37,000, and $46,000 over five years with a 10% finance rate and 12% reinvestment rate — MIRR is 12.61%, versus a plain IRR of about 13.1%. The gap is the reinvestment assumption doing its work.
How it’s calculated
MIRR = (FV⁺ ÷ PV⁻)^(1/n) − 1, where FV⁺ = Σ CFₜ(1+r_reinvest)^(n−t) over positive flows, PV⁻ = Σ |CFₜ|/(1+r_finance)^t over negative flows, and n = number of periods (last time index, with time 0 first). Sign convention: outflows negative, inflows positive; the result is per period, so annual flows give an annual MIRR.
All flows are assumed to land exactly one period apart; the result is a pre-tax rate and is only as realistic as your two rate assumptions.
MIRR of the example project as reinvestment rate changes (finance rate 10%)
| Reinvestment rate | MIRR |
|---|---|
| 6% | 10.06% |
| 8% | 10.90% |
| 10% | 11.75% |
| 12% | 12.61% |
Computed from flows −120,000; 39,000; 30,000; 21,000; 37,000; 46,000 with the MIRR formula above; plain IRR of the same series is about 13.1%.
Common mistakes
- Leaving out the time-0 investment or entering it as a positive number — the first flow is usually negative.
- Mixing period lengths: monthly flows with annual rates. Rates and spacing must share the same period.
- Swapping the two rates — the finance rate discounts the negative flows, the reinvestment rate compounds the positive ones.
- Counting n as the number of cash flows instead of periods: six flows starting at time 0 span five periods.
Frequently asked questions
What is the MIRR formula?
MIRR = (future value of positive cash flows at the reinvestment rate ÷ present value of negative cash flows at the finance rate)^(1/n) − 1, with n the number of periods from the first flow to the last.
Why is MIRR lower than IRR?
IRR assumes interim cash gets reinvested at the IRR itself; MIRR reinvests it at your (usually lower) stated rate. Whenever the reinvestment rate is below the IRR, MIRR comes out lower — and more realistic.
What is the difference between the finance rate and the reinvestment rate?
The finance rate is what it costs you to fund outflows (your borrowing cost or cost of capital) and is used to discount negative flows. The reinvestment rate is what interim inflows can actually earn, used to compound them forward.
Does this match Excel's MIRR function?
Yes — same definition and conventions. Excel's documented example, MIRR({−120000, 39000, 30000, 21000, 37000, 46000}, 10%, 12%), returns 12.61%, which is exactly what this calculator computes.
Can MIRR handle a negative cash flow in the middle of the series?
Yes. Any negative flow, whenever it occurs, is discounted back to time 0 at the finance rate; any positive flow is compounded to the end. That is why MIRR gives one answer even when IRR gives several.