Recommended from this result
Next toolsAssumptions and methodology
Transparent calculation notes for XIRR Calculator.
Formula used
The calculator solves the rate that makes all dated cash flows equal to zero on a present-value basis.
Methodology
- Invest and Monthly SIP rows are money in (negative cash flows); Withdraw and Current value rows are money out (positive cash flows).
- A Monthly SIP row is one investment a month on its first instalment's day, or the month's last day when the month is shorter.
- Use actual dates to annualize each cash flow.
- Solve iteratively for the annualized return rate.
Core assumptions
- Each row's date and type are entered correctly.
- The Current value row stands for the portfolio as if it were redeemed on that date.
- Annualization uses day-count timing between cash flows.
Not included
- Multiple sign changes can produce ambiguous IRR results.
- Taxes, dividends, fees, and reinvestment assumptions are not inferred automatically.
About XIRR Calculator
Guide1What is XIRR?
XIRR (Extended Internal Rate of Return) is a method to calculate the annualized return on investments where cash flows occur at irregular intervals. Unlike CAGR which assumes a single investment and single redemption, XIRR handles multiple investments and withdrawals made on different dates.
XIRR is particularly useful for measuring the actual performance of SIPs, where you invest different amounts on different dates, and for portfolios with multiple buy and sell transactions.
2When to Use XIRR vs CAGR
- Use XIRR when: You have multiple cash flows at irregular dates (SIPs, additional purchases, partial redemptions)
- Use CAGR when: You made a single lump sum investment and want to measure point-to-point return
- Use Absolute Return when: Investment period is less than one year
XIRR provides the most accurate picture of your investment performance when dealing with real-world investment patterns that involve multiple transactions.
3XIRR Formula
XIRR solves for the rate r in the following equation:
0 = Σ [Ci / (1 + r)^((di - d0) / 365)]
- Ci = Cash flow at date i (negative for investments, positive for redemptions)
- di = Date of cash flow i
- d0 = Date of the first cash flow
- r = The XIRR rate to be solved
The equation is solved iteratively using numerical methods since there is no closed-form solution.
4How to Use This XIRR Calculator
- Step 1: Add each investment with its date – use Add SIP for monthly instalments, or Paste transactions to bring in a statement
- Step 2: Add any withdrawals, then today's value as a Current value row
- Step 3: Results update as soon as you finish each entry