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Compounding calculator

See how a trading account grows when returns are reinvested, month by month, with optional monthly deposits.

USD
%

Negative values show how losses compound too.

months
USD
Final balance$8,042.19
Total gain$3,042.19
Total deposited$5,000.00
Equivalent yearly return26.8%2% a month, compounded

Returns in real trading are never steady. A strategy that averages 2% a month will have losing months, and drawdowns slow compounding far more than gains speed it up.

Balance month by month
MonthStartGainDepositEnd
1$5,000.00$100.00$0.00$5,100.00
2$5,100.00$102.00$0.00$5,202.00
3$5,202.00$104.04$0.00$5,306.04
4$5,306.04$106.12$0.00$5,412.16
5$5,412.16$108.24$0.00$5,520.40
6$5,520.40$110.41$0.00$5,630.81
7$5,630.81$112.62$0.00$5,743.43
8$5,743.43$114.87$0.00$5,858.30
9$5,858.30$117.17$0.00$5,975.46
10$5,975.46$119.51$0.00$6,094.97
11$6,094.97$121.90$0.00$6,216.87
12$6,216.87$124.34$0.00$6,341.21
13$6,341.21$126.82$0.00$6,468.03
14$6,468.03$129.36$0.00$6,597.39
15$6,597.39$131.95$0.00$6,729.34
16$6,729.34$134.59$0.00$6,863.93
17$6,863.93$137.28$0.00$7,001.21
18$7,001.21$140.02$0.00$7,141.23
19$7,141.23$142.82$0.00$7,284.06
20$7,284.06$145.68$0.00$7,429.74
21$7,429.74$148.59$0.00$7,578.33
22$7,578.33$151.57$0.00$7,729.90
23$7,729.90$154.60$0.00$7,884.50
24$7,884.50$157.69$0.00$8,042.19

The compounding formula

Balance after n months = starting balance × (1 + monthly return)n
With deposits, each month's deposit is added after that month's return

A 2% monthly return compounds to about 26.8% over a year, more than 12 × 2% = 24%, because each month's gain earns returns in the months after it.

Worked example

Start with $5,000 and earn 2% a month for 24 months with no deposits: the balance grows to about $8,042. Add $200 at the end of each month and it reaches about $14,127, of which $9,800 is money you deposited.

Use realistic numbers

Compounding tables are easy to make exciting and hard to live up to. Real accounts don't grow by the same percentage every month: they have losing months and drawdowns, and a single 30% drawdown needs a 43% gain to recover. Check that with the drawdown calculator, and use the risk of ruin calculator to see how risk per trade changes the odds of a deep loss along the way.

Frequently asked questions

What does compounding mean in trading?

Compounding means reinvesting gains so the next period's return is earned on a bigger balance. With a risk-percent position size, lot sizes grow as the account grows, which compounds results automatically.

Is 10% a month a realistic return?

Sustained returns of that size are very rare and usually come with very high risk. Use the calculator to understand the maths, not as a forecast, and be cautious of any product that promises a fixed monthly return.

How do losses affect compounding?

Losses compound too, and they hurt more than gains help: a 20% loss needs a 25% gain to recover. Enter a negative monthly return to see how a losing period shrinks the balance.

Should I add deposits or withdraw profits?

Regular deposits speed up growth, while withdrawals slow it down. The calculator adds a fixed deposit at the end of each month; to model withdrawals, lower the monthly return instead.

Free toolDrawdown recovery calculatorThe gain needed to recover a loss, and what a losing streak costs. Free toolRisk of ruin calculatorHow likely a strategy is to hit your maximum drawdown. Guide · 11 minRisk management for EA trading: sizing, drawdown and limitsA practical risk plan for running EAs.

Educational information only, not financial advice. Trading forex and CFDs on margin carries a high risk of losing money. Read our risk warning.

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