Discounted Payback Period Calculator
See how long a project takes to repay its cost once every future cash flow is discounted to today's value.
Quick answer
The discounted payback period is the time needed for the present value of cash inflows, each divided by (1+r)^t, to recover the initial investment. It is longer than simple payback.
Discounted Payback Period Calculator
Net Cash Flow per Year
Discounted Payback
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Simple Payback
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Extra Time from Discounting
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PV of Cash Inflows
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NPV over These Years
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Discounted Cumulative Cash Flow
| Year | Cash flow (₹) | Discount factor | Present value (₹) | Cumulative (₹) | Cumulative PV (₹) |
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Assumptions & method
- Present value of year k = cash flow ÷ (1 + r)^k, with r the annual discount rate. Cash flows arrive at the end of each year; the investment is paid at time 0.
- Discounted payback = (n − 1) + unrecovered present value at the start of year n ÷ present value of year n, where n is the first year the cumulative present value reaches zero or more.
- The same interpolation, on undiscounted amounts, gives the simple payback shown for comparison. Within a year, cash is assumed to arrive evenly.
- NPV is the cumulative present value after the last year you entered, so it only covers those years.
- Not included: cash flows beyond the years entered, taxes, inflation, salvage value, financing costs and changing discount rates.
Results are estimates based on the figures you enter. They are not guarantees and not financial advice.
What is the discounted payback period?
Simple payback treats money received in year five as equal to money received today, which flatters slow projects. The discounted payback period fixes that by converting each year's cash flow into present value at your required rate of return before adding them up. The time it takes for those discounted amounts to cover the initial investment is the discounted payback. It is always at least as long as simple payback, and the gap widens as the discount rate rises or cash arrives later. This page shows both figures side by side, with a table of discount factors and both cumulative totals.