New Delhi, Feb. 24 -- Anyone investing in various instruments, including a Systematic Investment Plan (SIP) or regular deposits in mutual funds, will need to consistently track returns to assess the performance of their investments and make informed decisions.

Tracking investments may seem straightforward initially; however, when multiple investments are involved, looking at returns may become complicated. Hence, the Extended Internal Rate of Return (XIRR) is important, as it helps to track investments.

Extended internal rate of return, or XIRR, is a financial metric used to calculate return on investments where multiple transactions occur at different time periods.

Unlike a simple rate of return, XIRR aims to provide an accurate estim...