Skip to content
CalculatorBuddy

Payback Period Calculator

Calculate regular and discounted payback periods, cash-flow return rate, and a year-by-year investment schedule.

Fixed Cash Flow

ExampleSample values — edit any field to see your result.

$
$ / year
%
%

Payback Period

3.156years

Estimated result

Discounted Payback Period
3.921years
Cash Flow Return Rate
18.86%per year

Cash Flow Schedule

Cash FlowNet Cash FlowDiscounted Cash FlowNet Discounted Cash Flow
Year 0-$100,000.00-$100,000.00-$100,000.00-$100,000.00
Year 1$30,000.00-$70,000.00$27,272.73-$72,727.27
Year 2$31,500.00-$38,500.00$26,033.06-$46,694.21
Year 3$33,075.00-$5,425.00$24,849.74-$21,844.48
Year 4$34,728.75$29,303.75$23,720.20$1,875.73
Year 5$36,465.19$65,768.94$22,642.01$24,517.74
Payback Period3.156 years
Measure how quickly an investment recovers its initial cost. Compare ordinary and discounted payback and inspect every annual cash flow.

Formula

Each discounted cash flow is CFₜ / (1 + d)ᵗ. Payback occurs inside the first year whose cumulative balance crosses zero; the fractional year is the unrecovered balance divided by that year's cash flow.

Examples

Growing annual cash flow

A $100,000 investment beginning at $30,000 per year, growing 5% for five years, pays back in 3.144 years. At a 10% discount rate its discounted payback is 3.943 years.

Frequently asked questions

What is the payback period?
It is the time until cumulative cash inflows recover the initial investment.
What is discounted payback?
Discounted payback first converts each future cash flow to present value, so it accounts for the time value of money.
Can I enter irregular cash flows?
Yes. The irregular tab accepts as many as 100 annual cash flows, with the first eight visible and later years under the expanded section.

Related calculators