Business
Investment payback period Calculator
Compare simple and discounted payback for a constant annual cash benefit. This free investment payback period calculator shows the calculation and its assumptions so you can compare your own figures.
Your results
Compare simple and discounted payback for a constant annual cash benefit.
Calculated outcomes
- Model Years
- 20
Assumptions and estimates
- Constant annual net cash benefits are discounted at year end. The fractional year interpolates within the recovery year; discounted payback is blank when recovery exceeds the model horizon.
- Method: Simple payback = investment ÷ annual benefit. Discounted payback accumulates discounted benefits and interpolates within the recovery year.
- A blank discounted result means the entered horizon does not recover the investment. Benefits after payback are not considered by this metric.
Useful next steps
- Check the payback period against how long you will keep the vehicle.
- Use Compare options to test an alternative side by side.
- Copy, print or download a record of this calculation when you need one.
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How the investment payback period calculation works
Simple payback = investment ÷ annual benefit. Discounted payback accumulates discounted benefits and interpolates within the recovery year.
A blank discounted result means the entered horizon does not recover the investment. Benefits after payback are not considered by this metric.
Using this calculator
- Enter your own figures in the labelled inputs. Keep the currencies, units and time periods consistent.
- Choose any applicable rate profile, pattern or assumption shown for this tool. Open additional inputs when relevant.
- Review simple payback years and discounted payback years, then read the stated assumptions and eligibility conditions before using the result.
Worked example
This is a static example using illustrative inputs, not facts about you or today’s date. The displayed eligibility selections and assumptions apply only to this example.
See example inputs
- Initial investment (€)
- 40000
- Annual net cash benefit (€)
- 12000
- Annual discount rate (%)
- 8
- Discounted model horizon (years)
- 20
- Simple Payback Years
- 3.3333 years
- Discounted Payback Years
- 4.0312