Knowing the internal rate of return (IRR) of an investment can help you plan for future growth and expansion of that investment. To calculate these numbers, use the IRR formula in Microsoft Excel 2019, 2016, 2013, 2010, 2007, Excel for Mac, Excel for Microsoft 365, and Excel Online.
How to Calculate IRR in Excel
The syntax for the IRR function is as follows: =IRR(values,[guess]) where "values" is the list of values that represent a series of equal incremental cash flows, such as a specific date each month or monthly. Values can also be cell references or ranges of references. For example, A2:A15 would be the values in the range of cells A2 through A15.
The "guess" is an optional argument that you estimate is close to your IRR result. If you do not use this argument, Excel defaults to a value of 0.1 (10%). When you use the Guess value, you will receive a #NUM error or the final result will not be what you expected. But you can always change this value.
Your values must contain at least 1 positive number and 1 negative number for the internal rate of return formula to work correctly. Your first negative number is likely your initial investment, but you may have other negative values in the matrix.
