# MIRR in Excel Article byTanuj Kumar ## MIRR Function in Excel

MIRR in excel is an in-build financial function used to calculate the modified internal rate of return for the cash flows supplied with a period. This function takes the set of initial investment or loan values and a set of net income values with the interest rate paid on initial amount including the interest earned from reinvestment of earned amount and returns the MIRR (modified internal rate of return) as output.

### Syntax

Parameters

The details of the parameters used in the MIRR formula in Excel are as follows:

• Values: Here, values are an array of cash flow representing a series of payment amounts or range of references or set of income values, including the initial investment amount.
• Finance_rate: The finance rate is a rate of interest paid on the amount used during cash flow.
• Reinvest_rate: Reinvest rate refers to the interest rate earned from the reinvested profit amount during cash flow.

### How to use the MIRR Function in Excel? (with Examples)

You can download this MIRR Function Excel Template here – MIRR Function Excel Template

#### Example #1

Consider an initial loan amount of 25,000 as an initial investment amount (loan amount) with an interest rate of 5% yearly, and you have earned an interest rate of 8% from the reinvested income. In MIRR, the loan amount or initial investment amount is always considered as (-ve) value.

Below are the table shows the details of income after a regular interval of time. Considering the cash flow of income for 1st, 2nd, 3rd, 4th, and 5th years are as follows: 10,911, 14,716, 19,635, 18,700, and 18,477.

Now calculate MIRR in Excel (Modified internal return rate) after 2 years:

=MIRR(B4:B6,B10,B11) and output MIRR is 3%.

Similarly, calculate MIRR (Modified internal rate of return) after 3 and 5 years:

MIRR after three years will be =MIRR(B4: B7, B10, B11), and output is 25%.

MIRR after five years will be=MIRR(B4: B9, B10, B11), and output is 31%.

#### Example #2

Consider an initial loan amount of 10,000 as an initial investment with an interest rate of 5% yearly, and you have earned an interest rate of 8% from the reinvested income.

Below are the table shows the details of income after a regular interval. Considering the cash flow of income for 1st, 2nd, 3rd, 4th, and 5th years are as follows: 7,505, 5,338, 9,465, 5,679, and 6,004.

Now calculate MIRR after 2 years:

=MIRR(B15:B17,B21,B22)and output MIRR is 16%.

Similarly, calculate MIRR after 3 and 5 years:

MIRR after three years will be =MIRR(B15: B18, B21, B22), and output is 34%.

MIRR after five years will be =MIRR(B15:B20,B21,B22) and output is 32%.

### Things to Remember

1. The loan amount is always considered as a negative value.
2. The modified internal return rate is always calculated on a variable cash flow after regular intervals.
3. Error handling:
• #DIV/0!:  MIRR ! Exception when the supplied error does not contain at least one negative value of one positive value.
• #VALUE!: MIRR will return this kind of exception when any of the supplied value is non-numeric.

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