phpfinancial

PHP IRR (Internal rate of return) financial function


How can I implement MS Excel's "IRR()" formula in PHP?

I tried the algorithm mentioned in this page but the results were not accurate and it was really slow.


Solution

  • After investigating a while, I ended up with the function copied below.

    It is based on this question.

    function IRR($investment, $flow, $precision = 0.001) {
        $min = 0;
        $max = 1;
        $net_present_value = 1;
        while(abs($net_present_value - $investment) > $precision) {
            $net_present_value = 0;
            $guess = ($min + $max) / 2;
            foreach ($flow as $period => $cashflow) {
                $net_present_value += $cashflow / (1 + $guess) ** ($period + 1);
            }
            if ($net_present_value - $investment > 0) {
                $min = $guess;
            } else {
                $max = $guess;
            }
        }
        return $guess * 100;
    }