Payback Period Calculator
Find how long it takes for a project's cash inflows to win back the money you put in.
Quick answer
The payback period is the time for cumulative cash inflows to recover the initial investment. With even flows it is investment / annual cash inflow; with uneven flows it is interpolated within the recovery year.
Payback Period Calculator
Net Cash Flow per Year
Payback Period
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Total Cash Inflows
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Net Cash After All Years
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Investment Recovered
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Initial Investment
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Cumulative cash flow (payback is where the line crosses zero)
Cumulative Cash Flow
| Year | Cash flow (₹) | Cumulative (₹) | Status |
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Assumptions & method
- Cumulative cash flow at year k = −initial investment + the sum of the net cash flows for years 1 to k.
- Payback = (n − 1) + unrecovered balance at the start of year n ÷ cash flow in year n, where n is the first year the cumulative total reaches zero or more.
- Cash flows are assumed to arrive evenly through each year, which is what makes the fractional interpolation valid. The initial investment is paid at time 0.
- Even mode multiplies one annual amount over the number of years you enter. Only the first time the total turns non-negative counts as payback.
- Not included: the time value of money (see the Discounted Payback Period Calculator), cash flows after payback, taxes, inflation, salvage value and financing costs.
Results are estimates based on the figures you enter. They are not guarantees and not financial advice.
What is the payback period?
The payback period is the time a project needs to generate enough cash to repay the initial investment. It is one of the simplest capital budgeting tests: add the yearly net cash flows into a running total and see when it first reaches zero. Because recovery rarely lands exactly on a year-end, the calculator interpolates inside that year to give a fractional answer such as 2.6 years. Managers like it because it is easy to explain and highlights liquidity risk. Its limitation is that it ignores both the timing of cash within the payback window and everything that happens afterwards, so treat it as a screening tool next to NPV.