Investment
XIRR
Also known as: Extended IRR, Internal Rate of Return
Extended Internal Rate of Return - Annualized return calculation method that accounts for timing of irregular cash flows.
Detailed Explanation
XIRR (Extended Internal Rate of Return) calculates the annualized return rate for investments with irregular cash flows and varying time periods. Unlike CAGR which assumes single investment and withdrawal, XIRR handles multiple SIP installments, partial withdrawals, and different investment dates. It provides a time-weighted return that reflects the actual performance considering money's time value.