Payback Period Calculator
How long to recover an investment.
Enter your values
ⓘ Live results
Results
- Payback period
- 3.33 years
- In months
- 40
- Discounted payback
- 5 years
- Cash recovered in 5 years
- $90,000.00
Quick answer
Payback period is the time until cumulative cash flow turns positive — a quick liquidity screen rather than a profitability measure.
Payback = Investment ÷ Annual cash flow
How to use the Payback Period Calculator
- 1Enter the upfront investment.
- 2Enter the annual cash it generates.
- 3Add a discount rate for the time-value version.
Worked example
Using the values the calculator loads with:
Inputs
- Initial investment60000 $
- Annual cash inflow18000 $
- Discount rate8 %
Results
- Payback period3.33 years
- In months40
- Discounted payback5 years
- Cash recovered in 5 years$90,000.00
Frequently asked questions
What is a good payback period?
Under 3 years for equipment, under 12 months for marketing spend.
Why use discounted payback?
It accounts for the fact that later cash is worth less today.
About this calculator
- Built and reviewed by James Whitfield · How we build and test calculators
- Report an error
Results are estimates for general information. For medical, legal, structural or financial decisions, confirm with a qualified professional.