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Finance Calculators
Payback Period Calculator
Calculate how many years it takes for an investment to pay itself back from its annual cash flow.
Payback period
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About the Payback Period Calculator
The payback period is the length of time it takes an investment to generate enough cash flow to recover its original cost. Shorter payback periods are generally considered less risky.
Formula: Payback Period = Initial Investment ÷ Annual Cash Flow
This simple version assumes even annual cash flows and does not account for the time value of money — for that, look at net present value (NPV) or internal rate of return (IRR) instead.
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