Compounding Calculator
See how consistent returns compound your trading account over time. Enter your starting balance, return per period, and optional contributions to project your future account value.
Enter your starting balance, return per period, and number of periods, then click Calculate to see your compounded account growth.
For educational purposes only. Not financial advice. Read full disclaimer
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Compounding Formulas
Without contributions: Final = Start × (1 + r)^n
With contributions: Balance(i) = (Balance(i-1) + C) × (1 + r)
Total Gain = Final Balance - Start - Total Contributions
Total Return % = Total Gain / Start × 100
r = return per period as decimal. n = number of periods. C = contribution per period.
Worked Examples
Example 1: $10,000 account growing at 3% per month for 12 months
You start with $10,000 and consistently make 3% per month for 12 months with no withdrawals or contributions.
- Final Balance = $10,000 × (1 + 0.03)^12 = $14,257.61
- Total Gain = $14,257.61 − $10,000 = $4,257.61
- Total Return = 42.58%
- Note: Simple multiplication would give 3% × 12 = 36% — compounding adds an extra 6.58% in gains.
Example 2: $5,000 account with $500/month contributions at 2% monthly
You start with $5,000, contribute $500 each month, and earn 2% per month for 24 months.
- Total Contributions = $500 × 24 = $12,000
- Final Balance ≈ $23,559 (contributions compound too)
- Total Gain from returns ≈ $6,559
- Each monthly contribution immediately starts earning 2% — earlier deposits compound more than later ones.
How to Use This Calculator
- Enter your starting balance — the current size of your trading account or investment.
- Set your return per period — your expected percentage gain each period (daily, weekly, monthly, etc.).
- Choose number of periods — how many periods to project (e.g. 12 for one year of monthly compounding).
- Add contributions (optional) — if you plan to add money each period, enter the amount here.
- Click Calculate — review your final balance, total gain, and period-by-period breakdown to see compounding in action.
Frequently Asked Questions
- What does "return per period" mean?
- It's your percentage gain in a single compounding period. If you earn 2% per month, enter 2. If you earn 0.5% per week, enter 0.5. The calculator compounds this rate each period — gains build on gains.
- Why is compounding so powerful for traders?
- Compounding turns consistent, modest returns into exponential growth. A trader who earns just 2% per month will more than double their account in 3 years — without adding a single dollar. The key is consistency and not withdrawing profits.
- How do contributions affect the final balance?
- Each contribution is added at the start of its period and immediately begins compounding. Earlier contributions grow more than later ones. Regular contributions accelerate growth significantly, especially over longer timeframes.
- What is a realistic monthly return for a trader?
- Most professional traders aim for 1–3% per month consistently. Higher monthly returns (5%+) are possible but typically come with significantly higher drawdown risk. Use realistic numbers — optimistic assumptions in compounding models can be very misleading.
- Does this account for taxes or fees?
- No — this is a pure mathematical projection. In practice, taxes on realized gains and trading fees will reduce your effective return per period. Subtract these costs from your expected return rate for a more realistic projection.