Compounding Calculator

What a fixed return per period compounds into over time, the total growth, and how far the compounding curve pulls away from simple, non-reinvested growth. A lesson in the maths, not a forecast of your account.

By Joey van Diest, founder and editorUpdated July 26, 2026

Starting balance

Return / period %

Periods

Add / period

Final balance: …
Total return: …
Total added: …
Compounding gain: …

The formula

each period: balance = balance × (1 + rate) + contribution
with no contributions: final = start × (1 + rate)^periods

Compounding means each period earns a return on the previous period's gains, not just on the original stake. Start with $10,000 and earn 5% a period: after one period you have $10,500; the next 5% is earned on $10,500, not $10,000, and so on. After 24 periods the account is $10,000 × 1.05²⁴ ≈ $32,251, a 222% total return from a rate that never changed. Simple growth, taking the 5% out each period instead of reinvesting, would add only 24 × 5% = 120%. The gap between the two is the compounding gain.

The curve is the point. It starts almost flat and bends sharply upward, because the base it grows on keeps getting larger. That shape is why long horizons and honest, modest rates beat short horizons and heroic ones, and why overstating your expected return by a few points warps the projection so badly. Change the rate from 5% to 8% above and watch the final balance roughly double; the exponential does not forgive optimism.

The honest caveat

No trading account grows in a smooth line. Real returns are lumpy, with losing streaks and drawdowns that a constant-rate model cannot show. This calculator is a lesson in the mathematics of compounding, not a forecast: it tells you what perfect consistency would produce, which is useful precisely as a benchmark for how rare perfect consistency is. To see how variance around an average return can threaten the account long before compounding pays off, run the risk of ruin simulator, and size each trade with the position size calculator so no single period can end the compounding early.

Frequently asked questions

Is a steady percentage per period realistic?: Honestly, rarely. This calculator assumes the same return every period, which no real trading account delivers, results are lumpy, with losing streaks and drawdowns that break the smooth curve. Its value is not as a forecast but as a lens: it shows what consistency would compound into, and just how sensitive the outcome is to the rate. Treat the output as an illustration of the mathematics, not a projection of your account.
Why does a small change in the rate matter so much?: Because compounding is exponential. Over 24 periods, 5% per period grows the account about 3.2x, while 10% grows it about 9.8x, double the rate is far more than double the result. That leverage on the rate is why traders chase higher returns, and also why overstating your expected return produces wildly optimistic projections. Small, honest numbers compound into large ones on their own.
Should I add deposits?: You can enter a contribution per period to model adding capital as you go, which is often a bigger driver of account growth than returns, especially early on. The calculator compounds the balance and adds the contribution each period. Turning off contributions shows pure compounding of trading returns alone.
What about taxes, fees and drawdowns?: Not modelled. Real net growth is lower after trading costs and taxes, and the path is never the smooth curve shown here, an account that averages 5% a period will still suffer drawdowns that test your discipline along the way. Use the risk of ruin simulator to see how variance around an average return can threaten the account before the compounding ever pays off.

Method and limitations

Pure arithmetic on your inputs, computed in your browser; nothing is fetched and nothing you type leaves the page. The model assumes a constant return every period, which real accounts do not deliver, and excludes taxes, fees and drawdowns. Read it as an illustration of how compounding works, not a projection of your results. This is an information tool, not financial advice.

This tool runs entirely in your browser. Nothing you enter is sent to us or stored.

For general information and education only. This is not financial advice and not a recommendation to buy or sell anything. Trading and investing carry risk, including the risk of losing more than your initial outlay. Always verify figures against your broker or the original source before acting on them.

Spotted an error? Email[email protected]and it will be corrected. Maintained byJoey van Diest.