Modified IRR (MIRR) Calculator
The modified internal rate of return gives a more realistic project return than plain IRR by reinvesting positive cash flows at a reinvestment rate and financing negative ones at a finance rate. Enter the initial investment, the later cash flows, and the two rates. The calculator compounds inflows forward, discounts outflows back, and takes the per-period root to produce the MIRR. It avoids the multiple-answer problem that ordinary IRR can have.
MIRR formula
FV inflows = sum of positive CF_t * (1 + reinvest)^(n - t)
PV outflows = sum of negative CF_t / (1 + finance)^t
MIRR = (FV inflows / |PV outflows|)^(1/n) - 1
Time 0 is the initial investment; the later cash flows are periods 1 through n. The initial investment is entered as a positive number and treated as a time-0 outflow.
Worked example
Initial investment $100,000; cash flows 30,000, 40,000, 50,000, 20,000; finance rate 8 percent, reinvestment rate 10 percent (n = 4):
- FV inflows = 30,000*1.1^3 + 40,000*1.1^2 + 50,000*1.1 + 20,000 = 163,330.00.
- PV outflows = 100,000 (at time 0).
- MIRR = (163,330 / 100,000)^(1/4) - 1 = 13.05 percent.
MIRR: frequently asked questions
What is MIRR and why use it instead of IRR?
The modified internal rate of return (MIRR) measures a project's return while assuming positive cash flows are reinvested at a realistic reinvestment rate and negative flows are financed at a finance rate. Standard IRR assumes reinvestment at the IRR itself, which is often unrealistic, and it can produce multiple answers when cash flows change sign more than once. MIRR avoids both problems.
How is MIRR calculated?
Grow every positive cash flow to the end of the project at the reinvestment rate to get the future value of inflows. Discount every negative cash flow to today at the finance rate to get the present value of outflows. Then MIRR = (FV of inflows / PV of outflows) to the power of (1/n), minus 1, where n is the number of periods.
What is the difference between the finance rate and the reinvestment rate?
The finance rate is the cost of the capital used to fund outflows (negative cash flows). The reinvestment rate is the return you can earn on cash the project generates (positive cash flows). Both are user inputs because they depend on your circumstances; they are often, but not always, set equal to the cost of capital.
How do I enter the cash flows?
Enter the initial investment as a positive number; it is treated as an outflow at time zero. Then list the later cash flows separated by commas, using a minus sign for any further outflows. The number of periods is taken from how many later cash flows you enter.
Official sources
- U.S. Securities and Exchange Commission, Investor.gov: Rate of Return.
- U.S. Securities and Exchange Commission, Investor.gov: Compound Interest Calculator.
Reviewed by the CalculatorHub team, edited by James Graham, 19 June 2026. See our methodology.