Compounding Calculator

Compounding means earning returns on your earlier returns. Enter your starting capital, an assumed monthly return, a monthly deposit and a time period. The calculator shows the projected balance, total deposits and profit, with a table of the path.

The formula

Each month: New balance = Previous balance × (1 + Monthly return) + Monthly deposit

The calculator applies the return first and then adds the deposit at month end.

Worked example

Starting capital $5,000, 3% monthly return, $200 monthly deposit, 24 months:

• Total deposited: $9,800 ($5,000 plus 24 × $200)
• Projected balance: about $17,000
• Projected profit: about $7,250

Read this before trusting the output

• 3% a month is aggressive. It works out to roughly 43% a year. Most professional funds do not sustain that. Try 1% or 2% for a more sober view.
• Returns are uneven. Real accounts have losing months. A steady 3% every month never happens, and draw downs change the path a lot. See the draw down recovery calculator.
• Growth needs consistency, not just returns. The biggest driver of the final number is often the deposit and the time, not the return.
• Fees and taxes are not included.

How to use it well

Run three scenarios: conservative, expected and optimistic. Plan around the conservative one. Use the projection to set savings goals, not to predict trading income.

FAQ

What monthly return should I enter? Use a figure you have actually achieved over at least a year, after fees. If you have no track record, start with a low number.

Why do the results grow faster over time? Returns are earned on a larger balance each month, so the same percentage produces more dollars.

Can I use it without deposits? Yes. Set the monthly deposit to 0.

Related tools: Draw down Recovery Calculator · Profit and Loss Calculator · All trading tools

Projections are hypothetical and not a guarantee of results. Not financial advice.