How to Calculate MIRR in Excel

What this does

MIRR corrects the two things that make plain IRR overstate a project. IRR implicitly assumes every interim inflow is reinvested at the IRR — which for a project returning 40 % is rarely true — and it can produce multiple answers when cash flows change sign more than once. MIRR takes explicit finance and reinvestment rates instead, producing one unambiguous figure that is usually lower and always more defensible. Where IRR and MIRR diverge widely, the project has large early inflows and the IRR was flattering it. The same idea underpins a lot of everyday Excel work, so the few minutes spent getting it right here pay back across every sheet you build afterwards. Treat it as a pattern, not a one-off, and it stops being something you look up and starts being something you reach for. Treat “calculate mirr in excel” as a small repeatable workflow rather than a one-off click you hope to remember next time. Use a small test block before the live file, so any surprise in the affected cells shows up while it is still harmless. When a formula is involved, keep the inputs labelled beside it, reference cells instead of typing values, and apply number formatting only after the result checks out. That turns a calculation you can defend to a CFO or an auditor into a method you can reuse, explain, and defend when the workbook leaves your screen.

A worked example

Flows of -100,000, 50,000, 40,000, 30,000 and 20,000 over four years: =IRR(B2:B6) might report 18 %, while =MIRR(B2:B6, 6%, 4%) returns closer to 12 %. The gap is the reinvestment assumption made honest — the 50,000 received in year one really earns 4 %, not 18 %. MIRR is the ranking measure that survives scrutiny, because it does not assume you can reinvest at the rate you are trying to prove. A practical tip before you scale it up: build it once on a small block of test data, confirm the number against the tool on this page, and only then point it at your real sheet. That one habit catches almost every mistake while it is still cheap to fix, long before a wrong figure reaches a report or a colleague.

In Google Sheets

If you are in Google Sheets rather than Excel, the good news is that the formula shown here is identical and the workflow barely changes — menus sit across the top instead of in a ribbon, and a few function names differ slightly, but anything you build here moves across with little or no rework. The aim was to get you unstuck fast and leave you a little more capable than a copy-paste would. The answer is at the top, the tool proves it, and the detail above shows why it holds — so the next time a colleague asks, you can answer without reaching for search. The short version of “calculate mirr in excel”: the answer is at the top of this page, the tool proves it on your own numbers, and the sections above explain why it holds so the next variation does not stump you. Excel rewards people who reference cells instead of typing values and who keep inputs separate from formulas, because that is what makes a result you can audit months later. Build it once, deliberately, with the live tool as a check, and you convert a one-off lookup into a reusable skill — which is the whole point of learning the why and not just the what.

Common mistakes

• Setting the reinvestment rate equal to the IRR, which reproduces IRR and defeats the purpose.
• Swapping the two rate arguments — finance comes first, reinvestment second.
• Using MIRR on irregularly dated flows; like IRR it assumes even periods.

Frequently asked questions