Payback Period Calculator
Estimate how long it takes to recover an initial investment from cash inflows.
How this calculator works
How to use this calculator
Enter the initial investment amount and the expected annual cash inflow. The calculator estimates the time needed to recover the investment.
Formula used
Payback Period = Initial Investment ÷ Annual Cash Inflow
Example calculation
Initial investment = $50,000 and annual cash inflow = $12,500. Payback Period = 4.0 years, or 48.0 months.
What the result means
A shorter payback period means the investment recovers its cost faster. This calculator does not include discount rate, financing cost, or risk adjustment.
Frequently asked questions
What is payback period?
Payback period is the time required to recover the original investment from cash inflows.
Does this include profit after payback?
No. It only estimates when the initial investment is recovered.
Can I use monthly cash inflow?
Yes, but the input here is annual cash inflow. Convert monthly cash inflow to annual by multiplying it by 12.