1. Excel’s IRR function. Excel’s IRR function calculates the internal rate of return for a series of cash flows, assuming equal-size payment periods. Using the example data shown above, the IRR ...

Let’s assume that we didn’t calculate the IRR of 57% as we did above and have no idea what the correct discount rate is. We can use Excel’s What-If calculator in this case.

How to calculate average stock returns in Excel. ... But despite that small weakness, calculating an IRR for your investments is an easy way to get a number to quantify your investment performance.