Payback Period Calculator
How many years an investment takes to pay for itself, year by year.
Every calculation runs locally in your browser. This is the simple (undiscounted) payback period — it doesn't account for the time value of money, unlike NPV or IRR.
Payback period
3.33 years
Cumulative cash flow by year
For informational and educational purposes only — not financial, investment, or tax advice, and not a substitute for consulting a qualified professional about your specific situation. TrueMeasureKit is not liable for decisions made based on these results. See our Terms of Service.
Why the answer usually lands on a fraction
The running total rarely hits exactly zero on the last day of a year, so this finds the year where the cumulative cash flow crosses from negative to positive, then interpolates within that year assuming cash arrives at a steady rate — the same logic as reading "3.2 years" as roughly a fifth of the way through year 4. Because it doesn't discount future cash flows to present value, payback period tends to favor projects that recover cash quickly over projects with a larger total return that arrives later — it answers "how fast do I get my money back," not "which project is more profitable overall."
Frequently asked questions
What's a limitation of using payback period alone?
It ignores the time value of money and anything that happens after the payback point — a project that pays back in 2 years but generates nothing after could be worse than one paying back in 3 years with strong returns afterward.
How is payback period different from ROI?
Payback period answers "how long until I break even," in units of time. ROI answers "how much did I gain relative to what I spent," as a percentage — they measure different things and are often used together.