Payback Period Calculator
How long an investment takes to pay for itself, after yearly running costs.
Results
Payback period
4.49
a
Months
53.9
Amount
1780.00
Rate
22.25
%
What this tool does
Payback is the simplest investment test there is: how many years before the savings have covered the cost. It ignores what happens after that point and ignores the time value of money, so use it to compare options quickly, not to value a long-lived asset.
Formula
return = investment ÷ annual gain
Variables
| Symbol | Meaning | Unit |
|---|---|---|
i | Cost | — |
c | Annual cash inflow | — |
m | Cost | — |
Y | Payback period | a |
M | Months | — |
N | Amount | — |
R | Rate | % |
Worked example
- Cost8000
- Annual cash inflow1900
- Cost120
- Payback period4.49 a
- Months53.9
- Amount1780.00
- Rate22.25 %
Limitations
- This is an informational calculator, not personalised financial advice. Rates, fees, taxes and contract conditions vary between institutions and countries.
- The result is an estimate based only on the values you type. Real situations often include factors this calculator does not know about.
- The tool works with whatever currency you use for the inputs; it does not convert between currencies.