Calculate how many years until an investment is paid back.
Payback Period (years) = Initial Investment ÷ Annual Cash Flow
This calculator uses simple payback period assuming constant annual cash flow.
The time it takes for an investment to recover its initial cost from the cash flows it generates.
Divide the initial investment by the annual cash flow. This assumes constant annual cash flow.
It gives a simple measure of risk: the shorter the payback, the sooner you recover your money.