# MIRR Calculator – Modified Internal Rate of Return

URL: https://speedycalculator.com/calculators/finance/mirr/
Last updated: 2026-10-25

> The MIRR calculator works out the modified internal rate of return of an investment – reinvesting positive cash flows at a realistic reinvestment rate and financing negative ones at the finance rate – which avoids the pitfalls of IRR.

## Inputs

- Finance rate (%)
- Reinvestment rate (%)
- Initial investment
- Cash flows for year 1, 2, 3 …

## Results

- Modified internal rate of return (MIRR)
- IRR for comparison
- NPV at the finance rate

## Formula

```
MIRR = (FV of positive cash flows at reinvestment rate ÷ PV of negative cash flows at finance rate)^(1 ÷ n) − 1
```

## Explanation

IRR assumes every cash flow is reinvested at the IRR itself, which overstates attractive projects. MIRR fixes this by using your actual reinvestment and borrowing rates, and always gives a single answer.

### How to use the MIRR Calculator – Modified Internal Rate of Return

- **Finance rate**
- **Reinvestment rate**
- **Initial investment**
- **Cash flows for year 1, 2, 3 …**

Results update as you type, and every field accepts the units shown in its menu.

### How it works

Enter the finance rate, the reinvestment rate, the initial investment and the yearly cash flows.

### Tips

- Use the nominal annual rate and pick the compounding frequency your bank or broker states.
- Small differences in return or fees compound into large differences over decades.
- Run the calculation with a cautious, a central and an optimistic return to see the range of outcomes.
- Past returns do not guarantee future returns – nothing here is investment advice.

### Common mistakes to avoid

- Comparing an APR with an APY or effective rate.
- Ignoring inflation, taxes and fees when judging a real return.
- Entering a percentage as a decimal (5 instead of 0.05 is correct here).

### Inputs explained

FieldWhat to enterFinance rateIn %Reinvestment rateIn %Initial investmentAmount in your currencyCash flows for year 1, 2, 3 …A list of numbers separated by commas, spaces or new lines

### What each result means

- **Modified internal rate of return (MIRR)** = [Modified internal rate of return (MIRR)]([Finance rate]÷100, [Reinvestment rate]÷100, 0 - [Initial investment], [Cash flows for year 1, 2, 3 …])×100
- **IRR for comparison** = [IRR for comparison](0 - [Initial investment], [Cash flows for year 1, 2, 3 …])×100
- **NPV at the finance rate** = [NPV at the finance rate]([Finance rate]÷100, [Cash flows for year 1, 2, 3 …]) - [Initial investment]

### Example values

How the main result changes when **Finance rate** changes and everything else stays at the example values above:

Finance rate (%)Modified internal rate of return (MIRR) (%)412.264612.264812.2641012.2641212.2641612.264

## Worked example

Inputs — Finance rate: 8 %; Reinvestment rate: 6 %; Initial investment: $10,000; Cash flows for year 1, 2, 3 …: 2000, 3000, 4000, 4000, 3000.

Results — **Modified internal rate of return (MIRR) = 12.264 %**; IRR for comparison = 16.605 %; NPV at the finance rate = $2,581.07.

## FAQ

**Why use MIRR instead of IRR?**
MIRR uses realistic reinvestment rates and gives a unique answer.

**What reinvestment rate should I use?**
Often the firm's cost of capital or a realistic return on spare cash.

**Is MIRR always lower than IRR?**
Usually, when the reinvestment rate is below the IRR.

**What formula does the MIRR Calculator – Modified Internal Rate of Return use?**
MIRR = (FV of positive cash flows at reinvestment rate ÷ PV of negative cash flows at finance rate)^(1 ÷ n) − 1.


## Sources

- [Corporate Finance Institute – financial ratios](https://corporatefinanceinstitute.com/)