To calculate the payback period, enter the following formula in an empty cell: "=A3/A4." The payback period is calculated by dividing the initial investment by the annual cash inflow.

The payback period represents how long it takes for an investment to recoup its costs. Learn about the payback period method of analyzing capital investment projects.

The payback period is the amount of time needed to recover the initial outlay for an investment. Learn how to calculate it with Microsoft Excel.