How to Calculate Internal Rate of Return (IRR)

Internal Rate of Return — The IRR measures a properties long term profitability by taking into account the annual net cash flow and the change in equity over time.

Calculating IRR, the rate of return formula sets Net Present Value (NPV) to zero. With the property Initial Total Investment, Cash Flow, the formula is solved for IRR, which is solved through iterative algorithms.

Calculated easily by computers…