Investment Growth Calculator

How compound growth actually works

Compound growth is what happens when a return isn't taken out but left to keep growing. Each month, this calculator applies the monthly-equivalent of your assumed annual rate to whatever balance you're carrying — the starting amount, plus every contribution and every month of growth that came before it — and then adds that month's contribution on top. The base each new month's growth is calculated on keeps getting larger, which is what makes the pace of growth accelerate the longer the money is left in place.

None of this depends on when in the year you contribute — it's consistent monthly arithmetic, run over however many years you choose. What it depends on entirely is the rate you enter, which is why that field is labelled as your own assumption rather than a market quote.

Why there's no built-in "typical" NSE return

Tools like this are often pre-filled with a long-run historical average — "the market has returned X% a year" — but no authoritative long-run average return for the Nairobi Securities Exchange is publicly available to cite. Rather than presenting a guess as a statistic, this calculator starts you at a clearly labelled illustrative estimate and expects you to edit it to reflect your own view, or to try a range of assumptions and see how sensitive the result is to the rate you choose. As the calculator states, the output is pure compounding arithmetic on the rate you enter — not a projection, a guarantee, or the return of any Ndovu product — and it's shown before fees and tax, both of which would reduce what you actually keep.

Worked example: KES 500,000 to start, KES 20,000 a month, at 11% a year

Using the calculator's own starting figures — a KES 500,000 lump sum, a KES 20,000 monthly contribution, an assumed annual return of 11%, over 10 years (120 months) — the monthly rate applied is 11% divided by 12, or roughly 0.917%. Each month the running balance grows by that amount, and the KES 20,000 contribution is added afterward, joining the base that grows the following month. Carried through all 120 months, the balance reaches KES 5,834,538. Total contributions over that time — the KES 500,000 starting amount plus 120 payments of KES 20,000 — add up to KES 2,900,000. The difference, KES 2,934,538, is growth: value the assumed rate contributed on top of money actually paid in, and in this example it's larger than the contributions themselves.

Change the rate, the years, or the contribution and the split between "paid in" and "grown" shifts with it — that sensitivity is the reason the rate is left editable rather than fixed.