How to calculate irr on a financial calculator

Written by bradley james bryant
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How to calculate irr on a financial calculator
Calculating IRR. (Calculator image by Alhazm Salemi from Fotolia.com)

Financiers and investors have developed several ways to measure the investment potential of an asset or business venture. One of the most popular measures is referred to as IRR or the internal rate of return. Every first-year finance student knows how to calculate the IRR on one of two financial calculators. While there are many different types of financial calculators, there are two that dominate the banking and financial world. They are the TI BA II financial calculator and the HP 10bII.

Skill level:
Easy

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Things you need

  • Financial calculator

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Instructions

  1. 1

    Press "CF" to access the cash flow input worksheet.

  2. 2

    Press "2nd CLR Work" to clear all previous information in the worksheet.

  3. 3

    Enter your cash flow data. CF0 is the flow at period zero and C01 is the first cash flow after CF0. C02 is the second time after zero, and so on. Press "#ENTER" after each entry to save.

  4. 4

    Press the down arrow key to enter the next cash outflow and then press "IRR" and "CPT" to calculate IRR.

  1. 1

    Clear all previous data in the calculator by pressing "{C_ALL}."

  2. 2

    Enter each cash flow amount by pressing "# CFj." The cash flow at (0) is the cash flow at period zero. Flow (1) is the first cash flow, and so on. For repeat cash flows, press "# {Nj}."

  3. 3

    After entering the last cash flow, enter "{IRR}" to calculate IRR.

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