Discounted Payback Period Calculator
Calculate the time to recover investment considering the time value of money.
Investment Details
$100,000
$10,000$10,000,000
10%
1%30%
Year 1
Year 2
Year 3
Year 4
Year 5
Discounted Payback Period
3.96 years
Simple Payback: 3.25 years
Simple Payback
3.25 yrs
Payback Difference
+0.71 yrs
Due to discounting
Total Discounted CF
$129,079
NPV
$29,079
Discounted Cash Flow Analysis
YearCash FlowPV FactorDiscountedCumulative
1$25,0000.909$22,727$22,727
2$30,0000.826$24,793$47,521
3$35,0000.751$26,296$73,817
4$40,0000.683$27,321$101,137
5$45,0000.621$27,941$129,079
Discounted Payback Period
Find t where: Sum of [CFn / (1+r)^n] = Initial Investment
Advantage over Simple Payback
Accounts for time value of money, providing a more realistic assessment of investment recovery time.
Limitation
Still ignores cash flows after the payback period. Use in conjunction with NPV for complete analysis.