Comments on: What is IRR and XIRR and how to Calculate it http://www.jagoinvestor.com/2009/08/what-is-irr-and-xirr-and-how-to.html Financial Planning , Insurance , Mutual Funds , Investments Sat, 11 Feb 2012 14:23:57 +0000 hourly 1 http://wordpress.org/?v=3.3.1 By: Manish Chauhanhttp://www.jagoinvestor.com/2009/08/what-is-irr-and-xirr-and-how-to.html#comment-33629 Manish Chauhan Fri, 13 Jan 2012 13:18:26 +0000 http://www.jagoinvestor.com/?p=230#comment-33629 Lino Good to hear that you learnt it easily :) Manish Lino

Good to hear that you learnt it easily :)

Manish

]]> By: Lino Asirhttp://www.jagoinvestor.com/2009/08/what-is-irr-and-xirr-and-how-to.html#comment-33626 Lino Asir Fri, 13 Jan 2012 12:52:19 +0000 http://www.jagoinvestor.com/?p=230#comment-33626 Really good one, which explains the IRR & XIRR in a simple and value added way.. Thank u... Really good one, which explains the IRR & XIRR in a simple and value added way.. Thank u…

]]> By: Manish Chauhanhttp://www.jagoinvestor.com/2009/08/what-is-irr-and-xirr-and-how-to.html#comment-30615 Manish Chauhan Mon, 19 Dec 2011 10:49:50 +0000 http://www.jagoinvestor.com/?p=230#comment-30615 Wakas Yes .. IRR and XIRR should give the same answer incase of equi distance payments . Note that IRR will assume that the payments are per year .. incase its for monhtly basis , then all you need to do is consider the returns as monthly and then convert it to yearly returns Manish Wakas

Yes .. IRR and XIRR should give the same answer incase of equi distance payments . Note that IRR will assume that the payments are per year .. incase its for monhtly basis , then all you need to do is consider the returns as monthly and then convert it to yearly returns

Manish

]]> By: Wakashttp://www.jagoinvestor.com/2009/08/what-is-irr-and-xirr-and-how-to.html#comment-30613 Wakas Mon, 19 Dec 2011 10:25:44 +0000 http://www.jagoinvestor.com/?p=230#comment-30613 Hi Manish, So going over your definations, what I understand is that we use XIRR when there are irregular intervals between the payments? (Since IRR assumes regular intervals between payments). So if I am calculating my returns on equal distance semi-annual cashflows, using IRR and XIRR should give me same results? Or should I not be using the XIRR at all? Does IRR consider investments on an annualized basis by default? Hi Manish,

So going over your definations, what I understand is that we use XIRR when there are irregular intervals between the payments? (Since IRR assumes regular intervals between payments).

So if I am calculating my returns on equal distance semi-annual cashflows, using IRR and XIRR should give me same results? Or should I not be using the XIRR at all?

Does IRR consider investments on an annualized basis by default?

]]> By: Anandhttp://www.jagoinvestor.com/2009/08/what-is-irr-and-xirr-and-how-to.html#comment-26516 Anand Fri, 26 Aug 2011 10:35:48 +0000 http://www.jagoinvestor.com/?p=230#comment-26516 Debanjan Ray, can you just give me a small example where XIRR formula of excel returns false value? I want to investigate. Debanjan Ray, can you just give me a small example where XIRR formula of excel returns false value?
I want to investigate.

]]> By: Anandhttp://www.jagoinvestor.com/2009/08/what-is-irr-and-xirr-and-how-to.html#comment-22087 Anand Tue, 12 Apr 2011 18:01:06 +0000 http://www.jagoinvestor.com/?p=230#comment-22087 It's not the question whether you trust XIRR or not. It's like an eternal truth. And excel does excellent job in giving you the answer; otherwise you have to break your head in mathematical formulas. It’s not the question whether you trust XIRR or not. It’s like an eternal truth.

And excel does excellent job in giving you the answer; otherwise you have to break your head in mathematical formulas.

]]> By: Manish Chauhanhttp://www.jagoinvestor.com/2009/08/what-is-irr-and-xirr-and-how-to.html#comment-21931 Manish Chauhan Thu, 07 Apr 2011 08:05:25 +0000 http://www.jagoinvestor.com/?p=230#comment-21931 debranjan I think you should go with the first principles only which is working for you , this whole topic will actually become a big project to study if we do it Will take up this some time later , In between if you find something insightful in your studies , let me know Manish debranjan

I think you should go with the first principles only which is working for you , this whole topic will actually become a big project to study if we do it

Will take up this some time later , In between if you find something insightful in your studies , let me know

Manish

]]> By: Debanjan Rayhttp://www.jagoinvestor.com/2009/08/what-is-irr-and-xirr-and-how-to.html#comment-21910 Debanjan Ray Wed, 06 Apr 2011 15:41:57 +0000 http://www.jagoinvestor.com/?p=230#comment-21910 Hi Manish, I have considered payment at the starting of the period. So the last SIP will run for zero duration. This means in the previous example, the 7th month SIP will not have any gain. At the beginning of 7th SIP, the 1st month SIP (=X) will run for 6 months growing to X*(1+ r/12)^6; 2nd month SIP will grow to X*(1+r/12)^5 and so on. Now do a simple addition. At the end I can not trust XIRR; but can trust on basic mathematics of compound interest formula. - Debanjan Ray Hi Manish,
I have considered payment at the starting of the period. So the last SIP will run for zero duration. This means in the previous example, the 7th month SIP will not have any gain. At the beginning of 7th SIP, the 1st month SIP (=X) will run for 6 months growing to X*(1+ r/12)^6; 2nd month SIP will grow to X*(1+r/12)^5 and so on. Now do a simple addition.
At the end I can not trust XIRR; but can trust on basic mathematics of compound interest formula.
- Debanjan Ray

]]> By: Manish Chauhanhttp://www.jagoinvestor.com/2009/08/what-is-irr-and-xirr-and-how-to.html#comment-21794 Manish Chauhan Mon, 04 Apr 2011 04:53:06 +0000 http://www.jagoinvestor.com/?p=230#comment-21794 Debaranjan Looks like you did lot of study on this :) . good work I think there can be one point we are missing , we are not sure if the payments are considered at the end of the period or the starting of the period because thats the only reason I can think for the difference we are getting . Manish Debaranjan

Looks like you did lot of study on this :) . good work

I think there can be one point we are missing , we are not sure if the payments are considered at the end of the period or the starting of the period because thats the only reason I can think for the difference we are getting .

Manish

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