Investing Basics Intermediate

XIRR (Extended Internal Rate of Return)

💡 In plain English: Your actual annualised return when you've made multiple investments at different times — the honest measure of SIP performance.

Definition

A method to calculate the annualised return of an investment with irregular cash flows (like SIP investments made monthly).

📌 Real-World Example

You invested via SIP for 3 years (₹5,000/month). Your XIRR is 14.2% — that's your actual annual return accounting for the fact that early investments earned more. CAGR would be misleading here.

🔢 Formula

Calculated using XIRR function in Excel/Google Sheets
Try it yourself
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Related Terms

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Capital Gains
The profit you make when you sell an investment for more than you...
SIP (Systematic Investment Plan)
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Mutual Fund
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⚠️ Educational Content: All definitions and examples on this page are for educational and consultancy reference purposes only. They do not constitute financial, legal, or investment advice. Moneykar is not registered with SEBI, CBUAE, SCA, or any financial regulator. Consult a qualified professional before making financial decisions.

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