Payback Period Calculator

Initial investment vs. periodic cash inflows — find how many periods (years) it takes to recover the investment.

Initial investment (negative cash flow) — amount:

Period label (for display):

Periodic cash inflows (positive numbers)

You can add or remove rows

Period	Cash inflow

Result

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Enter values and click Calculate.

Cumulative cash flows

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Payback Period Calculator

 What It Does:

 Calculates how long it takes to recover the initial investment cost from cash inflows (profits/savings).

 Key Terms:

 The project or investment's initial cost is called the initial investment. Cash Inflows: Annual (or periodic) profits/savings generated by the investment.

 Payback Period: The amount of time needed to "break even" (in years or months). Simple Payback Period Formula: Payback Period=Initial InvestmentAnnual Cash InflowPayback Period=Annual Cash InflowInitial Investment​

 Keep in mind that if cash inflows fluctuate annually, add them up until the initial investment is recouped. Example:

 $50,000 for the initial investment Annual Cash Inflow: $10,000

 Payback Period=50,00010,000=5 yearsPayback Period=10,00050,000​=5 years

 When to Use It:

 Comparing project risks quickly. Short-term investment decisions (ignores time value of money).

 Limitations:

 Doesn’t consider profits after payback.

 Ignores the time value of money (use Discounted Payback Period for that)