Worked example
An investment of $12,000 returning $900 monthly takes about 13.33 months to repay.
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Business finance
Payback Period Calculator
Estimate how long a steady cash flow takes to repay an investment.
Enter your numbers
Adjust the example to calculate using your own figures. Results update instantly.
Your results
Calculated locally- Payback period
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- Payback period in years
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Important assumptions
Assumes constant positive cash flow; does not include discounting or returns after payback.
How to use your results
Simple payback offers a quick way to compare how long capital remains committed. Unlike NPV it ignores the time value of money.
Start with the example values, then replace them with amounts for the same transaction or time period. Double-check rates and units. The results are estimates intended to help you explore possible outcomes, not financial or tax advice.
What payback measures
Simple payback measures how quickly net cash inflows recover the initial cash outlay. Shorter payback can improve liquidity, but it does not automatically mean higher total profit.
Cash flows after payback
Two investments may pay back at the same time and produce very different returns afterward. A discounted-cash-flow measure such as net present value adds a time-value perspective, though it also relies on forecasts.
Does this tool discount future money?
No. It divides the initial investment by constant monthly net cash inflow without discounting or estimating later returns.
How to calculate payback period
Payback in months = initial investment ÷ monthly net cash inflow
Simple payback offers a quick way to compare how long capital remains committed. Unlike NPV it ignores the time value of money.