# What is the MIRR?

Computes the modified internal rate of return (MIRR) of a series of cash flows from a finance rate and a reinvestment rate, with the IRR to compare.

- Page: https://www.acalculator.org/finance/mirr-calculator
- JSON spec: https://www.acalculator.org/finance/mirr-calculator.json
- Version: 1bc55eeaf050

## Default answer

Example with the default inputs (Cash flows, starting today [-16,000, 2,000, 4,000, 5,000, 5,000, 5,000, 5,000], Finance rate 9%, Reinvestment rate 9%): At a 9% finance rate and a 9% reinvestment rate, these cash flows have a MIRR of 12%.

## Inputs

| Key | Label | Description |
| --- | --- | --- |
| flows | Cash flows, starting today | The net cash flow now (period 0), then at the end of period 1, 2 and so on, separated by spaces or new lines. Negative for money paid out. |
| finance | Finance rate | The rate per period paid on money borrowed for the outflows. |
| reinvest | Reinvestment rate | The rate per period earned on the inflows when reinvested. |

## Outputs

| Key | Label | Description |
| --- | --- | --- |
| mirr | MIRR | The modified internal rate of return, per period. |
| terminal | Future value of inflows | Every inflow compounded to the last period at the reinvestment rate. |
| outflows | Present value of outflows | Every outflow discounted to today at the finance rate. |
| periods | Periods | The number of periods after today. |
| irr | IRR | The internal rate of return, when exactly one rate makes the NPV zero. |

## Method

MIRR = (FV of inflows at the reinvestment rate ÷ PV of outflows at the finance rate)^(1 ÷ n) − 1, where n is the number of periods after today.

## Assumptions

- The first cash flow is today (period 0); each later one is at the end of its period.
- The rates are per period and stay the same for every period.
- The IRR shows only when exactly one rate makes the net present value zero.

## Worked examples

1. flows = -16,000 or 2,000, finance = 9%, reinvest = 9% gives mirr = 12.004761%, terminal = $31,589.22, outflows = $16,000.00. Source: OpenStax, Principles of Finance, 16.4 Alternative Methods (MIRR: outflows discounted to time 0 and inflows compounded to the end at the cost of capital; the $16,000 project at 9% has a MIRR of 12%). https://openstax.org/books/principles-finance/pages/16-4-alternative-methods (OpenStax rounds its factors and shows a terminal value of $31,595.22).
2. flows = -120,000 or 39,000, finance = 10%, reinvest = 12% gives mirr = 12.609413%, terminal = $217,297.50. Source: Microsoft Support, MIRR function (−120,000 then 39,000, 30,000, 21,000, 37,000, 46,000; finance rate 10%, reinvest rate 12%: 13% after five years, −5% after three; 13% at a 14% reinvest rate). https://support.microsoft.com/en-us/office/mirr-function-b020f038-7492-4fb4-93c1-35c345b53524: 13%.
3. flows = -120,000 or 39,000, finance = 10%, reinvest = 12% gives mirr = -4.804466%. Source: Microsoft Support, MIRR function (−120,000 then 39,000, 30,000, 21,000, 37,000, 46,000; finance rate 10%, reinvest rate 12%: 13% after five years, −5% after three; 13% at a 14% reinvest rate). https://support.microsoft.com/en-us/office/mirr-function-b020f038-7492-4fb4-93c1-35c345b53524: −5% after three years.
4. flows = -120,000 or 39,000, finance = 10%, reinvest = 14% gives mirr = 13.475911%. Source: Microsoft Support, MIRR function (−120,000 then 39,000, 30,000, 21,000, 37,000, 46,000; finance rate 10%, reinvest rate 12%: 13% after five years, −5% after three; 13% at a 14% reinvest rate). https://support.microsoft.com/en-us/office/mirr-function-b020f038-7492-4fb4-93c1-35c345b53524: 13% at a 14% reinvest rate.
5. flows = -1,000 or -500, finance = 8%, reinvest = 10% gives mirr = 6.756802%, outflows = $1,462.96, terminal = $1,780.00.

## FAQ

### What is MIRR?

MIRR, the modified internal rate of return, is the yearly return of a project when its outflows are financed at one rate and its inflows are reinvested at another. It fixes two problems of the IRR: the IRR assumes cash is reinvested at the IRR itself, and it can have more than one answer.

### How do I calculate MIRR?

Discount every outflow to today at the finance rate and add them up. Grow every inflow to the last period at the reinvestment rate and add them up. MIRR = (future value of inflows ÷ present value of outflows)^(1 ÷ n) − 1, where n is the number of periods.

### What is the difference between MIRR and IRR?

IRR is the rate that makes the net present value zero, and it assumes every inflow is reinvested at that same rate. MIRR uses a reinvestment rate you choose, usually the cost of capital. When the IRR is high, the MIRR is usually lower and more realistic.

### What finance and reinvestment rates should I use?

A common choice is the company’s cost of capital (WACC) for both. Use a different finance rate when the outflows are paid with a loan at a known rate, and a reinvestment rate equal to what you can really earn on the cash.

### Why does MIRR need a negative and a positive cash flow?

MIRR compares the cost of the outflows with the value of the inflows. With no outflows there is nothing to earn a return on, and with no inflows there is nothing earned, so there is no rate.

### Is the MIRR the same as Excel’s MIRR function?

Yes. Like Excel, this calculator treats the first value as today and each later value as the end of a period. Excel’s example of −120,000 followed by five years of returns, at 10% and 12%, gives 13%; this page shows 12.61% before rounding.

## Sources

- OpenStax, Principles of Finance, 16.4 Alternative Methods: MIRR with outflows discounted to time 0 and inflows compounded to the end at the cost of capital; the $16,000 project at 9% has a MIRR of 12%. https://openstax.org/books/principles-finance/pages/16-4-alternative-methods (retrieved 2026-10-05)
- Microsoft Support, MIRR function: the formula and an example (−120,000; 39,000, 30,000, 21,000, 37,000, 46,000; finance rate 10%, reinvest rate 12%). https://support.microsoft.com/en-us/office/mirr-function-b020f038-7492-4fb4-93c1-35c345b53524 (retrieved 2026-10-05)