0 years to recover
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Simple payback
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Discounted payback
Simple payback = investment ÷ annual inflow. The discounted version accounts for the time value of money at your discount rate, so it takes a little longer.
Frequently Asked Questions
What is the payback period?
It is how long it takes for an investment’s cash inflows to repay its initial cost. A shorter payback is generally less risky. The discounted payback also reflects that future money is worth less today.
Calculate the simple and discounted payback period of an investment.