Formula

Internal Rates Return (IRR) Formula Explained for Forex Trading

5 min read

The internal rate of return (IRR) is a formula used to determine an investment’s profitability. It works by calculating the expected rate of return on an investment, also known as the rate of return percentage. This rate is calculated by taking the net present value (NPV) of an investment’s cash flow and then adjusting it for the cost of capital. In simple terms, it measures a company or an individual’s rate of return on investments. The IRR formula helps to provide an indication of the long-term profitability of a particular investment, and is used to help make decisions about whether or not to pursue a particular investment opportunity.