Payback Period Calculator
Calculate how long it takes to recover your initial investment from cash flows.
Investment Details
$100,000
$10,000$10,000,000
Year 1
Year 2
Year 3
Year 4
Year 5
Payback Period
3.25 years
Investment will be fully recovered
Initial Investment
$100,000
Total Cash Flows
$175,000
Total Return
$75,000
ROI
75.00%
Cash Flow Recovery
YearCash FlowCumulativeStatus
0-$100,000-$100,000Invested
1$25,000-$75,000Pending
2$30,000-$45,000Pending
3$35,000-$10,000Pending
4$40,000$30,000Recovered
5$45,000$75,000Recovered
Payback Period Formula
Payback Period = Years before recovery + (Unrecovered cost / Cash flow in recovery year)
Advantages
Simple to calculate and understand. Useful for assessing liquidity risk and quick project comparisons.
Limitations
Ignores time value of money and cash flows after payback. Use discounted payback or NPV for better analysis.