Payback Period Calculator

Work out locally the payback period of an investment - simple and discounted - from initial outlay, annual cash flow and rate. No upload.

Payback period

5.01

Discounted payback

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The payback period shows after how many years an investment is recovered through its cash flows. It is the most intuitive figure of investment appraisal and a simple measure of risk: the faster an investment pays back, the shorter the capital is tied up. This calculator gives both common variants - the simple (undiscounted) and the discounted payback period.

The calculation runs entirely locally in your browser, in pure JavaScript - nothing is uploaded and nothing is stored. The simple payback period is the initial investment divided by the annual cash flow. The discounted payback period first discounts each cash flow at the rate and adds it up until the investment is covered; it is therefore always longer than the simple one. If the discounted cash flows do not recover the investment within 100 years the calculator shows "> 100".

An honest note: the payback period ignores everything that happens after break-even - a project with a long but very high payout can still be the better one. It is a risk and liquidity figure, not a profitability figure. Judge the merit additionally with the NPV and IRR calculators. A constant annual cash flow is assumed. Amounts in euros as an example - the maths applies to any currency. Not investment advice.

Specifications

Specifications
Input formats	Form inputs (no file)
Processing	Locally in your browser (JavaScript)
File upload	None

In 3 steps

Enter the initial investment and the annual cash flow.
Enter the discount rate per year for the discounted variant.
Read off the simple and discounted payback period.

Limitations: The payback period ignores everything after break-even and is a risk/liquidity figure, not a profitability figure - judge the merit additionally with the NPV and IRR calculators. A constant annual cash flow is assumed; if not reached when discounted within 100 years it shows "> 100". Amounts in euros as an example - the maths applies to any currency. Not investment advice.

FAQ

Are my inputs uploaded?

No. The calculation runs entirely locally in the browser (pure JavaScript); nothing is sent or stored.

What is the difference between simple and discounted payback?

The simple one counts the cash flows at face value; the discounted one discounts them first and is therefore always longer - it accounts for later euros being worth less.

Is a shorter payback always better?

It lowers risk but says nothing about overall profitability - a project with a longer but higher payout can be better. Use it together with NPV and IRR.

What does the "> 100" display mean?

That the discounted cash flows do not recover the investment within 100 years - the cash flow is too small relative to the rate. In practice it does not pay back on a discounted basis.

Result

Specifications

In 3 steps

FAQ

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