Compounding Calculator

What compounding does

Compounding is reinvesting each period’s gain so the next period earns a return on a larger balance. Because every period builds on the last, growth accelerates over time — the same fixed percentage return produces a bigger cash gain each period. It is the reason small, consistent gains can add up to a large figure over many periods.

How to use this calculator

Enter your starting balance, the gain you expect per period (as a percentage), and the number of periods — a period can be a day, a week or a month, whatever matches the return you enter. The calculator returns your projected final balance, the total cash gain, and the total return as a percentage.

How compounding is calculated

Final balance = starting balance × (1 + gain%)^periods

For example, 10,000 growing at 5% per period for 12 periods becomes 10,000 × 1.05¹² ≈ 17,959 — a total return of about 79.6%, even though the per-period gain never changed. Without compounding (simple interest), the same 5% × 12 would return only 60%.

A realistic word of caution

Compounding cuts both ways. A run of losing periods shrinks the balance just as quickly as gains grow it, and a single large drawdown can undo many periods of progress — recovering from a 50% loss takes a 100% gain. Steady, fixed per-period returns almost never happen in real trading, so treat any projection here as an illustration of the mechanics of compounding, not a forecast of results. Size every trade to a risk you can afford, and let compounding work over realistic timeframes.