Payback Period Calculator
An investment of 100,000 returning 30,000, 35,000, 40,000 … pays back in 2.875 years.
2.875 years
Full answer, then cut to fewer decimals (not rounded):
- 2.875 years
- 2.87 years
- 2.8 years
- Discounted payback period
- 3.447333333 years
- Net present value
- 48032.61079
| Year | Cash flow | Cumulative | Discounted cumulative |
|---|---|---|---|
| 1 | 30000 | -70000 | -72727.273 |
| 2 | 35000 | -35000 | -43801.653 |
| 3 | 40000 | 5000 | -13749.061 |
| 4 | 45000 | 50000 | 16986.545 |
| 5 | 50000 | 100000 | 48032.611 |
Step-by-step solution
- Add the cash flows year by year until the cumulative total turns positive, then interpolate within that year.
- For the discounted payback, first divide each year’s flow by (1 + r)ⁿ.
Payback Period Formula
Payback = years until Σ cash flow = investment
discounted: use CFₙ/(1 + r)ⁿ
Worked Example
A 1,00,000 investment returning 30,000 rising by 5,000 a year:
- Add the cash flows year by year until the cumulative total turns positive, then interpolate within that year.
- For the discounted payback, first divide each year’s flow by (1 + r)ⁿ.
Net present value: 48032.61079
| Year | Cash flow | Cumulative | Discounted cumulative |
|---|---|---|---|
| 1 | 30000 | -70000 | -72727.273 |
| 2 | 35000 | -35000 | -43801.653 |
| 3 | 40000 | 5000 | -13749.061 |
| 4 | 45000 | 50000 | 16986.545 |
| 5 | 50000 | 100000 | 48032.611 |
GATE tip
GATE often defines payback on cash flow after tax plus depreciation: build the yearly flows first, then use this tool.
More Plant Design, Economics and Reaction Engineering Calculators
-
Depreciation Calculator
Straight line: d = (P − S)/n
declining balance f = 1 − (S/P)^(1/n); SYD d_k = (P − S)(n − k + 1)/[n(n + 1)/2]
Example: Equipment costing 1,00,000 with a 10,000 salvage value and a 10-year life, year 3: Depreciation in year 3 = 9000.
-
Residence Time Distribution Calculator
t̄ = ∫tC dt / ∫C dt, σ² = ∫t²C dt / ∫C dt − t̄²
tanks-in-series N = t̄²/σ²
Example: A pulse tracer read every minute for 10 minutes: Mean residence time t̄ = 4.70213 min.
Frequently asked questions
What does payback ignore?
The time value of money (in the simple version) and every cash flow after the payback year.
Why is discounted payback always longer?
Discounting shrinks later cash flows, so it takes longer to recover the investment.
Sources
- The International System of Units (SI), 9th edition (SI Brochure), Bureau International des Poids et Mesures .
Last reviewed: . Factors are stored exactly and computed with 50-digit decimal arithmetic. See how we verify conversion factors.
Cite this page
APA
Scientific Converters. (2026, October 15). Payback Period Calculator. Retrieved October 29, 2026, from https://scientificconverters.com/calculators/payback-period-calculator/
IEEE
Scientific Converters, "Payback Period Calculator," scientificconverters.com. Accessed: Oct. 29, 2026. [Online]. Available: https://scientificconverters.com/calculators/payback-period-calculator/