How to Calculate Payback on Excel

1. Open a new Microsoft Excel worksheet and type 'Initial Investment' in cell A1. Put the cost of the project in cell B1. For example, assume a project costs $500.
2. Type 'Annual Cash Inflows' in cell A2. Put your estimated cash inflows each year in cell B2. In the example, assume you receive $60 a year from the project.
3. Type 'Payback' in cell A3.
4. Type '=B1/B2' in cell B3. In the example, B3 will say 8.333333333. The project will take about eight years and three months to cover its costs.