CAGR (Compound Annual Growth Rate) is the mean annual growth rate of an investment over a period longer than one year. It smooths out volatility to show a constant rate at which an investment would have grown if it grew at a steady rate.

Should I invest lump sum or monthly?

Lump sum generally outperforms in rising markets because your money is invested longer. Dollar/Naira cost averaging (monthly) reduces timing risk and is better for most African investors who earn monthly salaries.

Investment Return Calculator — CAGR, ROI & Total Returns

Investment Details

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Monthly Contribution

Annual Return Rate (%)

Investment Period (years)

Compounding

About Investment Returns

Understanding Compound Interest

Albert Einstein reportedly called compound interest "the eighth wonder of the world." When your investment earns returns, those returns themselves start earning returns — creating exponential growth over time. The longer you invest, the more dramatic the compounding effect becomes.

Investment Options in Africa

Nigerian T-Bills: 12-18% annually
Nigerian money market funds: 10-16% (Cowrywise, PiggyVest, Carbon)
Kenyan T-Bills: 12-16%
SA Unit Trusts: 8-14% (Allan Gray, Coronation)
NSE/JSE Stock Index: Historical 10-15% long-term
Always compare returns against inflation to calculate real returns.

For more information on investment calculations, see Investopedia's CAGR guide.

Frequently Asked Questions

What is CAGR?

CAGR (Compound Annual Growth Rate) shows the mean annual growth rate over a period. It smooths volatility to show a constant rate your investment would have grown at steadily.

How is ROI calculated?

ROI = (Final Value - Total Invested) / Total Invested x 100%. Shows total percentage gain.

Lump sum vs monthly investing?

Lump sum outperforms in rising markets. Monthly investing (Naira/Dollar cost averaging) reduces timing risk and suits salary earners better.