How do you calculate the payback period?

It is calculated by dividing the initial investment amount by the annual cash inflow generated by the investment.

Does this payback period calculator store any data?

No data is stored or shared. Everything is calculated locally in the user's browser.

Payback Period Calculator

Q: What is the payback period?

The payback period is the time required for an investment to recover its initial cost through annual cash flows.

Calculate how long it takes to recover the initial investment based on annual cash inflows.

Initial Investment

Annual Cash Flow

How This Payback Period Calculator Works

The payback period tells you how long it takes to recover the original investment from annual cash inflows. It is a simple and widely used financial tool for evaluating investment risk and liquidity.

This calculator uses the standard formula:
Payback Period = Initial Investment ÷ Annual Cash Flow.
The result shows the number of years required to break even.

All calculations happen instantly in your browser, and no information is stored or shared.

Frequently Asked Questions

What is the payback period?

The payback period is the time it takes for an investment to repay its initial cost through annual cash inflows.

How is the payback period calculated?

It is calculated by dividing the initial investment by the annual cash flow generated by the project or investment.

Is the payback period a good decision tool?

It is helpful for quick comparisons and assessing risk, but it does not account for profitability beyond the break-even point.

Does this tool save any data?

No. Everything is calculated instantly and locally in your browser.