Calculate your return on investment (ROI), net profit, and annualized return (CAGR).
This calculator computes the return on investment (ROI) and annualized return (CAGR — Compound Annual Growth Rate) for any investment, based on what you put in (including any additional costs or fees), what it's worth now (or what you sold it for), and how long you held it.
Total cost basis combines your initial investment with any additional costs. Net profit is the final value minus this total cost basis. ROI expresses net profit as a percentage of the total cost basis. CAGR (Compound Annual Growth Rate) expresses the same overall gain as an equivalent constant annual growth rate, which makes it easier to compare investments held for different lengths of time.
Formula: Total Cost Basis = Initial Investment + Additional Costs. Net Profit = Final Value − Total Cost Basis. ROI = (Net Profit ÷ Total Cost Basis) × 100. CAGR = [(Final Value ÷ Total Cost Basis)(1 ÷ Years) − 1] × 100.
Example: A CA$10,000 initial investment with no additional costs, held for 5 years and now worth CA$15,000, gives a net profit of CA$5,000, a total ROI of 50%, and an annualized return (CAGR) of about 8.45% — meaning a constant 8.45% annual growth rate over 5 years would produce the same overall result. (Note: this example is for illustration purposes only.)
ROI and CAGR are general-purpose metrics that apply to almost any type of investment — stocks, ETFs, real estate, a small business, or any other asset. CAGR is particularly useful for comparing investments held for different periods, since a 50% total return over 2 years (CAGR of about 22.5%) is a very different result from a 50% total return over 10 years (CAGR of about 4.1%), even though the total ROI figure is the same. In Canada, when you sell an investment for more than its cost basis (often called the "adjusted cost base," which can include certain fees), the gain is generally a capital gain, and a portion of capital gains is included in your taxable income — the exact treatment depends on current tax rules, which can change, and on whether the investment is held in a registered account (like a TFSA or RRSP, where gains may be tax-free or tax-deferred — see our TFSA Calculator and RRSP Calculator) or a non-registered account. For real estate specifically, additional costs like renovation expenses, legal fees, and real estate commissions on sale should be included in your cost basis and final value respectively for an accurate ROI — and remember your principal residence may be eligible for an exemption from capital gains tax, which doesn't apply to investment properties.
ROI (Return on Investment) is the total percentage gain or loss over the entire holding period, regardless of how long that period was. CAGR (Compound Annual Growth Rate) converts that total return into an equivalent constant annual rate, making it easier to compare investments held for different lengths of time on a like-for-like basis.
Include any costs directly associated with acquiring or holding the investment that aren't reflected in the initial investment or final value - for example, brokerage fees, legal fees, renovation costs for a property, or closing costs. Including these gives a more accurate picture of your true return after all associated expenses.
No. This calculator shows the pre-tax net profit, ROI, and CAGR. In Canada, a gain on the sale of an investment held outside a registered account (TFSA or RRSP) is generally a capital gain, a portion of which is included in your taxable income - the specific rules can change, so consult a tax professional or the Canada Revenue Agency for current treatment.
Yes. If your final value is less than your total cost basis, net profit will be negative, and both ROI and CAGR will be negative percentages, reflecting a loss. This works the same way for any investment that has decreased in value.
Yes, for a high-level ROI/CAGR estimate - enter your purchase price plus renovation and transaction costs as your total cost, and your current value or sale price (minus selling costs, if you prefer to net them out) as the final value. Note this calculator doesn't account for rental income received during the holding period or ongoing costs like property tax and maintenance, which a full real estate investment analysis would typically include.
This is expected for investments held over multiple years - CAGR represents the annual rate, while ROI represents the cumulative rate over the whole period. For example, a 50% total ROI over 10 years corresponds to a CAGR of only about 4.1%, since compounding at 4.1% annually for 10 years produces a 50% total gain.
Disclaimer: The information and figures provided on this page are for educational and illustrative purposes only and do not constitute financial or tax advice. This calculator shows pre-tax figures and does not account for capital gains tax, which applies to gains on investments held outside registered accounts (TFSA or RRSP) in Canada, with rules that can change over time. Always consult a qualified financial adviser or tax professional for advice specific to your investments and tax situation.