Payback Period Calculator
Calculate payback period from your own entered figures.
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Currency: Amounts are calculated in the currency you select; this site does not convert between currencies and does not use live exchange rates.
What this tool does
Calculate payback period from your own entered figures. Cash flows are yearly and the recovery within the crossing year is assumed to arrive evenly; payback ignores all cash flows after the crossing point.
How to use the Payback Period Calculator
- Enter or select cash flows (one per line, first = initial investment, negative).
- Enter or select discount rate for discounted payback (%).
- Read the calculated result; change any measurement to compare alternatives.
Formula
simple payback: the year cumulative cash flow (starting from the negative initial flow) turns positive, interpolated within that year; discounted payback repeats this with each flow discounted at the entered rate
- flows
- Cash flows (one per line, first = initial investment, negative)
- rate
- Discount rate for discounted payback (%)
Cash flows are yearly and the recovery within the crossing year is assumed to arrive evenly; payback ignores all cash flows after the crossing point.
Worked example
For payback period calculator, the following measurements illustrate the exact method: Cash flows (one per line, first = initial investment, negative): -1000 500 500 500; Discount rate for discounted payback (%): 10.
Inputs
- Cash flows (one per line, first = initial investment, negative)-1000 500 500 500
- Discount rate for discounted payback (%)10
Result
- Payback period (years)2
- Discounted payback period (years)2.35
Results explained
- Payback period (years)
- Payback period (years) from the formula above. Cash flows are yearly and the recovery within the crossing year is assumed to arrive evenly; payback ignores all cash flows after the crossing point.
- Discounted payback period (years)
- Discounted payback period (years) from the formula above. Cash flows are yearly and the recovery within the crossing year is assumed to arrive evenly; payback ignores all cash flows after the crossing point.
Frequently asked questions
simple payback: the year cumulative cash flow (starting from the negative initial flow) turns positive, interpolated within that year; discounted payback repeats this with each flow discounted at the entered rate
Cash flows are yearly and the recovery within the crossing year is assumed to arrive evenly; payback ignores all cash flows after the crossing point.
No. All numbers are entered by you or come from the dated reference table shown on this page; calculations run locally.
This is an estimate, not financial, tax or legal advice. Verify the inputs and output with official sources and a qualified professional.
Check period consistency, currency, percentage inputs and the assumptions: Cash flows are yearly and the recovery within the crossing year is assumed to arrive evenly; payback ignores all cash flows after the crossing point.