MIRR

See Also

Returns the modified internal rate of return for a series of periodic cash flows. MIRR considers both the cost of the investment and the interest received on reinvestment of cash.

Syntax

MIRR(values,finance_rate,reinvest_rate)

Values is an array or a reference to cells that contain numbers. These numbers represent a series of payments (negative values) and income (positive values) occurring at regular periods.

Values must contain at least one positive value and one negative value to calculate the modified internal rate of return. Otherwise, MIRR returns the #DIV/0! error value.
If an array or reference argument contains text, logical values, or empty cells, those values are ignored; however, cells with the value zero are included.

Finance_rate is the interest rate you pay on the money used in the cash flows.

Reinvest_rate is the interest rate you receive on the cash flows as you reinvest them.

Remarks

MIRR uses the order of values to interpret the order of cash flows. Be sure to enter your payment and income values in the sequence you want and with the correct signs (positive values for cash received, negative values for cash paid).
If n is the number of cash flows in values, frate is the finance_rate, and rrate is the reinvest_rate, then the formula for MIRR is:

Example

The example may be easier to understand if you copy it to a blank spreadsheet.

How?

Create a blank spreadsheet.
Select the example in the Help topic.

Selecting an example from Help
Press CTRL+C.
In the spreadsheet, select cell A1, and press CTRL+V.
To switch between viewing the formula that returns the result and the result in the cell, select the cell and press F2 and then ENTER, or click Commands and Options on the spreadsheet toolbar, click the Formula tab, and look in the Formula in active cell (active cell) box.

Data	Description
-$120,000	Initial cost
39,000	Return first year
30,000	Return second year
21,000	Return third year
37,000	Return fourth year
46,000	Return fifth year
10.00%	Annual interest rate for the 120,000 loan
12.00%	Annual interest rate for the reinvested profits
Formula	Description (Result)
=MIRR(A2:A7, A8, A9)	Investment's modified rate of return after five years (13%)
=MIRR(A2:A5, A8, A9)	Modified rate of return after three years (-5%)
=MIRR(A2:A7, A8, 14%)	Five-year modified rate of return based on a reinvest_rate of 14 percent (13%)