Finance & Money Calculators

Payback Period Calculator

Calculate simple payback period by dividing an investment cost by annual cash inflow.

Payback Period Calculator — Online Calculator

Payback Period & ROI Timeline Calculator

Calculate simple and discounted payback periods, net present value (NPV), and capital recovery timelines for uniform or uneven cash flows.

$
Upfront capital expenditure
$
Expected net cash per year
%
For discounted payback & NPV
Simple Payback Period

3.33 yrs

3 years and 4 months

Discounted Payback

4.03 yrs

4y 0m at 8% rate

Net Present Value (NPV)

+$50,651

At 8% cost of capital

Capital Recovery Status

Breakeven

$50,000 recovered

Moderate payback period of 3.33 years (3y 4m).

Standard commercial capital recovery timeframe. Ensure cash flows are protected against macro volatility.

YearInflowCumulativeDiscountedCumulative Disc.
Year 1$15,000$15,000$13,889$13,889
Year 2$15,000$30,000$12,860$26,749
Year 3$15,000$45,000$11,907$38,656
Year 4$15,000$60,000$11,025$49,682
Year 5$15,000$75,000$10,209$59,891
Year 6$15,000$90,000$9,453$69,343
Year 7$15,000$105,000$8,752$78,096
Year 8$15,000$120,000$8,104$86,200
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Disclaimer: This tool provides informational results only and should not be used as professional advice.

The Payback Period Calculator estimates simple payback by dividing an investment cost by annual cash inflow.

Payback period in years=Investment costAnnual cash inflow\text{Payback period in years}=\frac{\text{Investment cost}}{\text{Annual cash inflow}}

Worked example

An investment costing 12,000with12,000 with 3,000 annual cash inflow has a simple payback period of 12,000 / 3,000 = 4 years.

Questions

Does this include discounting?

No. Simple payback does not discount future cash flows or account for the time value of money.

Does it include maintenance or operating costs?

Only if those costs have already been subtracted from the annual cash inflow you enter.

Does payback prove an investment is profitable?

No. It ignores cash flows after payback, residual value, financing, risk, and changing inflows.

Limitations

Both inputs must be positive. Use discounted cash-flow analysis for a complete investment appraisal.

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