Formula and calculation method
Simple payback period = initial investment / constant annual net cash inflow.
Undiscounted payback, assuming a constant annual cash inflow.
How to use payback period calculator
- Set Initial investment. The example below uses 10000.
- Set Annual net cash inflow. The example below uses 2500.
- Select Calculate to update the result. Reset restores the illustrated inputs. Copy, print or download your own result if you need a record.
Worked example
Example inputs
- Initial investment
- 10000
- Annual net cash inflow
- 2500
- Simple payback (years)
- 4
Factors affecting your result
Undiscounted payback, assuming a constant annual cash inflow.
Changing initial investment changes the scenario being evaluated. Adjust one input at a time when comparing results, keep a copy of the assumptions, and compare values using the same unit and period. A precise arithmetic result does not make an uncertain assumption precise.
Frequently asked questions
How does the payback period calculator work?
Simple payback period = initial investment / constant annual net cash inflow.
What inputs does Payback Period Calculator need?
Enter initial investment, annual net cash inflow. Choose values that correspond to the same situation and measurement convention.
How should I interpret the payback period calculator result?
Undiscounted payback, assuming a constant annual cash inflow.
Are my payback period calculator inputs uploaded?
No. The calculation runs in this browser. Favorites, recent tool names, theme and formatting preferences may be saved locally, but calculation inputs are not sent to a calculation server or stored by this website. Shared links do not include entered values.
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