MIRR function: Description, Usage, Syntax, Examples and Explanation

Syntax of MIRR function

MIRR(values, finance_rate, reinvest_rate)

The MIRR function syntax has the following arguments:

• Values: An array or a reference to cells that contain numbers. These numbers represent a series of payments (negative values) and income (positive values) occurring at regular periods.
  • Values must contain at least one positive value and one negative value to calculate the modified internal rate of return. Otherwise, MIRR returns the #DIV/0! error value.
  • If an array or reference argument contains text, logical values, or empty cells, those values are ignored; however, cells with the value zero are included.
• Finance_rate: The interest rate you pay on the money used in the cash flows.
• Reinvest_rate: The interest rate you receive on the cash flows as you reinvest them.

MIRR formula explanation

• MIRR uses the order of values to interpret the order of cash flows. Be sure to enter your payment and income values in the sequence you want and with the correct signs (positive values for cash received, negative values for cash paid).
• If n is the number of cash flows in values, frate is the finance_rate, and rrate is the reinvest_rate, then the formula for MIRR is:

Example of MIRR function

Steps to follow:

1. Open a new Excel worksheet.

2. Copy data in the following table below and paste it in cell A1

Note: For formulas to show results, select them, press F2 key on your keyboard and then press Enter.

You can adjust the column widths to see all the data, if need be.