XIRR Calculator Online For SIP and Irregular Investments
If you are investing in Systematic Investment Plans(SIPs) then it is very important to understand how much returns you are getting on your SIP investments.
Use our Simple and easy-to-use XIRR Calculator Online For SIP and Irregular Investments.
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XIRR Calculator Online For SIP
SIP Investments
Total Maturity Amount:
Results:
| Total Invested Amount | Maturity Amount | Total Returns in % | XIRR Returns in % |
|---|---|---|---|
| – | – | – | – |
How to Use XIRR Calculator Online For SIP
The XIRR (Extended Internal Rate of Return) tool helps users calculate the internal rate of return for a series of irregularly timed cash flows. This can be especially useful for investments that don't have periodic or regular cash flows.
Using the XIRR Calculator Online For SIP
Step 1: Open the XIRR tool in your web browser.
Step 2: You'll find input fields for dates and corresponding cash flows:
- Date: Enter the date of the cash flow.
- Cash Flow: Enter the value of the cash flow. (Note: Outflows of money, such as an investment, should be entered as negative values, while inflows, such as returns or dividends, should be positive.)
Step 3: Click on the "XIRR" button. The tool will calculate and display the XIRR value for the provided cash flows.
Step 4: If you wish to reset and start afresh, click on the "Reset" button next to the "XIRR" button.
Understanding XIRR
XIRR stands for Extended Internal Rate of Return. It's an extension of the IRR (Internal Rate of Return) concept, tailored for non-periodic cash flows.
How is XIRR Calculated?
XIRR is calculated using an iterative process. The goal is to find a rate at which the present value of future cash flows, when discounted back to the initial investment date, equals the initial investment amount.
The formula for XIRR calculation is:
XIRR = r such that NPV = 0
where:
- NPV = Net Present Value of all cash flows
- r = Annualized rate of return
- Cash flow = Amount of money invested or withdrawn at a given date
The NPV of a cash flow is calculated by discounting it by the rate of return and the time elapsed since the initial investment. The formula is:
NPV = Cash flow / (1 + r) ^ t
where:
- t = Time elapsed in years since the initial investment
To calculate XIRR, you need to input the following data:
- The initial investment amount and date
- The subsequent cash flows (positive or negative) and their dates
- A guess value for the rate of return (optional)
You can use our online XIRR calculator or an Excel spreadsheet to compute XIRR easily. Alternatively, you can use an iterative method to find XIRR manually.
Applications of XIRR
XIRR is commonly used in finance to compare the profitability of investments with irregular cash flows. It's especially useful for:
- Evaluating the performance of stocks with dividends.
- Assessing the return on real estate investments with rental incomes.
- Comparing different investments on a common scale.
Conclusion on XIRR Calculator Online For SIP and Irregular Investments
XIRR is a powerful tool for investors and financial analysts. By considering the timing and value of cash flows, it offers a more accurate reflection of an investment's performance than traditional metrics. Using the XIRR tool, you can quickly and accurately gauge the return on your investments.
