IRR vs MIRR

Calculates IRR and modified IRR side by side, with MIRR compounding interim cash flows forward at an explicit reinvestment rate instead of at the IRR itself. Inputs are the initial investment, the interim annual cash flow, the exit cash flow, the holding period, and the reinvestment rate.

By Devon Coombs, CPA, MBA · Teaching Professor of Finance, Santa Clara University · Reviewed August 2026

From the author: Devon Coombs, CPA, MBA teaches finance at Santa Clara University and works with corporate teams on practical AI.

AI training for finance teams · Consulting · The 10 Laws of Finance

Interactive Tool

IRR vs MIRR

Initial investment (outflow)

Interim cash flow (each year)

Exit cash flow (final year)

Holding period (years)

Reinvestment rate

IRR

45.0%

assumes reinvest at IRR

MIRR

32.9%

reinvest at 12%, the honest rate

Terminal value of inflows

$2,071K

compounded at 12%

IRR − MIRR gap

12.1%

IRR's overstatement

IRR quietly assumes every interim dollar reinvests at the IRR itself. When the IRR is high and interim cash is large, that overstates realized wealth, MIRR compounds inflows at a realistic rate and gives one honest number.

Learn the concept

This calculator comes from the free Entrepreneurial Finance course, where the concept is taught with readings, worked examples, and practice questions.

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When to use this measure

IRR vs MIRR

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Built by Devon Coombs, CPA, MBA, Teaching Professor of Finance at Santa Clara University.