XIRR vs IRR Function: Applicational Differences We will use the following dataset to illustrate the difference between XIRR and IRR in Excel. Example 1 – Using the XIRR Function in Excel Step 1: Enter the following formula of the XIRR function in cell D10. =XIRR(D5:D9,C5:C9) Step 2:...
We can also use the IRR function to learn the monthly IRR. Enter the following formula in cell D16: =IRR(C5:C10) Press ENTER You will see the monthly IRR in cell D16. XIRR Function vs. IRR Function in Excel Here, we will describe the difference between XIRR and IRR functions. ...
With IRR(), all cash flows are discounted using an integer number of compounding periods. For example, the first payment is discounted one period, the second payment two periods, and so on. The XIRR() function permits payments to occur at unequal time periods. With this function you associat...
In conclusion, Excel's YIELD and XIRR functions can produce different results due to factors such as the frequency of coupon payments, the difference between the bond's issue and settlement dates, assumption of cashflow reinvestment, and handling of non-periodic cash flows. Understanding these fact...