justyourcalculatorPayback Period Calculator
See when an investment earns back its cost, with and without discounting.
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Payback Period Calculator
How long until an investment pays for itself
Payback period
4 years
4 years
- Discounted payback at 8%
- 5.01 years
- Net present value
- $67,752.03
- Total cash flows
- $250,000.00
Cash flows arrive at the end of each year, spread evenly within the year for the fractional payback.
- Simple
- Discounted
| Year | Cash flow | Cumulative | Discounted | Cumulative discounted |
|---|---|---|---|---|
| 1 | $25,000.00 | -$75,000.00 | $23,148.15 | -$76,851.85 |
| 2 | $25,000.00 | -$50,000.00 | $21,433.47 | -$55,418.38 |
| 3 | $25,000.00 | -$25,000.00 | $19,845.81 | -$35,572.58 |
| 4 | $25,000.00 | $0.00 | $18,375.75 | -$17,196.83 |
| 5 | $25,000.00 | $25,000.00 | $17,014.58 | -$182.25 |
| 6 | $25,000.00 | $50,000.00 | $15,754.24 | $15,571.99 |
| 7 | $25,000.00 | $75,000.00 | $14,587.26 | $30,159.25 |
| 8 | $25,000.00 | $100,000.00 | $13,506.72 | $43,665.97 |
| 9 | $25,000.00 | $125,000.00 | $12,506.22 | $56,172.20 |
| 10 | $25,000.00 | $150,000.00 | $11,579.84 | $67,752.03 |
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How the payback period calculator works
The payback period is how long an investment's cash flows take to add up to its cost. Within the year it pays back, we assume cash arrives evenly, so a fraction of that year is added.
The discounted payback period first discounts each year's cash flow at your required rate, which makes later money worth less, so it is always longer. Neither measure counts cash flows after payback, so use NPV or IRR to judge overall value.
Using and checking your result
Published by JustYourCalculator. Check the units and assumptions above, and compare a known example before relying on the output. Calculations use browser arithmetic and may round displayed values.
This is an educational estimate, not a lender quote, tax filing calculation or investment recommendation. Actual costs depend on current rules, fees and your circumstances. Verify important decisions with official sources and a qualified adviser.
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