What this calculator does
Payback period works out how many years of cash flows it takes to recover an initial investment, plain and discounted. Enter your own figures above and the answer updates as you type: nothing is fixed in the code, so the result reflects exactly the numbers you supply.
The formula this calculator evaluates is printed under the tool and explained below, so you can check the working by hand or reuse it in a spreadsheet.
The formula
FormulaSimple: cumulative cash flow until it reaches the investment, interpolated within the crossing year. Discounted: same, but each cash flow is first divided by (1+r)^year
The inputs explained
| Field | What to enter |
|---|---|
| Initial investment ($) | A number, measured in your currency. Starts at 100000. |
| Cash flow each year (comma separated) | A list of numbers, separated by commas or spaces. |
| Discount rate (%) | A number, measured in %. Starts at 8. |
Worked examples
Every figure in the tables below is produced by this page’s own calculator at build time, so the numbers and the tool always agree. Select any row to load that scenario.
How the answer changes with initial investment
Every other input is held at the calculator’s starting values while initial investment varies. Select any row to load that scenario into the calculator.
How the answer changes with initial investment
| Initial investment ($) | Simple payback period | Discounted payback period | Total undiscounted cash flow |
|---|---|---|---|
| 50,000 | 1.83 years | 2.04 years | $140,000.00 |
| 75,000 | 2.57 years | 2.94 years | $140,000.00 |
| 100,000 | 3.33 years | 4.10 years | $140,000.00 |
| 150,000 | not recovered within the cash flows given | not recovered within the cash flows given | $140,000.00 |
| 200,000 | not recovered within the cash flows given | not recovered within the cash flows given | $140,000.00 |
| 300,000 | not recovered within the cash flows given | not recovered within the cash flows given | $140,000.00 |