Find how long it takes to recover an investment, with discounted payback and NPV.
| Period | Cash flow | Cumulative (net) | Discounted cumulative (net) |
|---|---|---|---|
| 1 | $12,000.00 | -$38,000.00 | -$38,888.89 |
| 2 | $12,000.00 | -$26,000.00 | -$28,600.82 |
| 3 | $12,000.00 | -$14,000.00 | -$19,074.84 |
| 4 | $12,000.00 | -$2,000.00 | -$10,254.48 |
| 5 | $12,000.00 | $10,000.00 | -$2,087.48 |
| 6 | $12,000.00 | $22,000.00 | $5,474.56 |
| 7 | $12,000.00 | $34,000.00 | $12,476.44 |
| 8 | $12,000.00 | $46,000.00 | $18,959.67 |
| 9 | $12,000.00 | $58,000.00 | $24,962.65 |
| 10 | $12,000.00 | $70,000.00 | $30,520.98 |
| 11 | $12,000.00 | $82,000.00 | $35,667.57 |
| 12 | $12,000.00 | $94,000.00 | $40,432.94 |
| 13 | $12,000.00 | $106,000.00 | $44,845.31 |
| 14 | $12,000.00 | $118,000.00 | $48,930.84 |
| 15 | $12,000.00 | $130,000.00 | $52,713.74 |
| 16 | $12,000.00 | $142,000.00 | $56,216.43 |
| 17 | $12,000.00 | $154,000.00 | $59,459.66 |
| 18 | $12,000.00 | $166,000.00 | $62,462.65 |
| 19 | $12,000.00 | $178,000.00 | $65,243.19 |
| 20 | $12,000.00 | $190,000.00 | $67,817.77 |
Please do not make financial decisions based on these results.
What is the Payback Period Calculator?
The payback period is how long it takes for an investment to earn back its cost. The discounted payback adjusts each cash flow for the time value of money.
Comparing returns
To judge past performance use the average return calculator and the ROI calculator. For projects with several cash flows, the IRR calculator gives a single comparable rate, and the payback period calculator shows how long it takes to recover the cost.
How to use the Payback Period Calculator
- Enter your numbers. Start with Initial investment ($), Cash inflow per period ($), Discount rate (% per year), then fill in Look ahead (periods). Use a rate of return you consider realistic; small changes compound into large differences. Fields marked optional can stay at zero.
- Choose your options. Period change how the result is worked out, and the form updates to match your choice.
- Read the result. The highlighted box gives the Payback period, and the cards below show Discounted payback, NPV over 20 periods, Total cash returned. Tables and charts break it down further.
- Test other scenarios. Results update as you type. Change one value at a time to see what drives the answer, and press Reset to go back to the defaults.
Formula and how it works
Example with real numbers
Here is the Payback Period Calculator using the default values shown in the calculator above:
Inputs
| Initial investment ($) | 50,000 |
|---|---|
| Cash inflow per period ($) | 12,000 |
| Period | Year |
| Discount rate (% per year) | 8 |
| Look ahead (periods) | 20 |
Results
| Payback period | 4.17 years |
|---|---|
| Discounted payback | 5.28 years |
| NPV over 20 periods | $67,817.77 |
| Total cash returned | $240,000.00 |
| Profit after 20 periods | $190,000.00 |
With these inputs the calculator returns Payback period: 4.17 years. Change any value in the calculator to see how the result moves.
What the results tell you
The results panel of the Payback Period Calculator reports Payback period, discounted payback, npv over 20 periods, total cash returned and profit after 20 periods. Compare these figures while changing one input at a time, and use the related calculators below to look at the same situation from another angle.
Tips for better results
Method and limits. This calculator applies the formula in the section above to your inputs, in your browser; nothing you enter is stored on our servers. Investment returns are not guaranteed. The result shows what the numbers you enter would produce, not what the market will do. It is for information, not financial, tax or legal advice.
Frequently asked questions
Can I enter uneven cash flows?
Yes. Paste one amount per line.
What is a good payback period?
It depends on the industry and risk. Shorter is safer; many small businesses look for payback within two to three years.
Are investment returns guaranteed?
No. Real returns vary. Use these tools to compare scenarios, not to predict results.
What rate of return should I assume?
There is no guaranteed rate. Test a range of conservative and optimistic rates, and remember that fees and inflation reduce your real return.
Are the results guaranteed?
No. Results depend entirely on the numbers you enter and the formulas shown on this page. Please do not make financial decisions based on them alone; confirm important figures with a licensed professional.
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