Compound return calculator
See how a per-period return compounds your trading account over time. Enter your starting capital, the realistic return you expect each period, how many periods, and any recurring deposit — get final equity, total growth and the compound annual growth rate (CAGR). Free, instant, runs entirely in your browser.
Compound growth rate per period: —
The formula
compound growthfinal = start × (1 + r)^N # r = return per period, N = periods
# Example: $10,000, 5% per period, 24 periods, no deposits
final = 10000 × (1.05)^24 = $32,251
growth = 32251 − 10000 = $22,251
With a recurring deposit, each period the balance grows by the return and then the new deposit is added. The calculator runs the loop period-by-period so deposits compound for the remaining periods.
Compounding cuts both ways. A −50% drawdown needs a +100% gain just to break even, because the recovery compounds off the smaller base. That is the entire reason professional traders obsess over drawdown and position sizing rather than headline returns.
How traders use this
- Enter a backtested, net-of-fees per-period return — never a hopeful number.
- Match the period to your return: monthly return → period = months.
- Compare scenarios: what does a 1% lower return cost you over 5 years?
- Pair it with the expectancy calculator to ground the return in your real win rate and R:R.
The U.S. SEC explains the same compounding mechanics for long-term investing in its compound interest calculator guidance. The math is identical whether the engine is a bot or a buy-and-hold portfolio.
Frequently asked questions
How does compounding work in trading?
Compounding means each period's gains are added to your capital, so the next period earns a return on a larger base. Mathematically, final equity = start × (1 + r)^N. The growth is exponential, not linear, which is why small, consistent returns can become large over many periods — and why a single large loss is so damaging, since it shrinks the base everything compounds on.
What return rate should I enter?
Use a realistic, backtested per-period return — not a hoped-for one. If your strategy has historically averaged 2% per month after fees and slippage, enter 2% with the period set to months. Avoid plugging in headline annual numbers as if they were monthly; that is the single most common way people fool themselves with a compounding calculator.
Why is compounding a double-edged sword?
The same multiplication that grows winners also magnifies losers. A 50% drawdown requires a 100% gain to recover, because the recovery compounds off a smaller base. This is why disciplined position sizing and drawdown control matter more than chasing the highest possible return.
Does this calculator include fees or taxes?
No. It models gross compounding on the return you enter. Use a per-period return that is already net of trading fees, funding and slippage, and remember that realised gains may be taxable in your jurisdiction. Treat the output as an illustration of the math, not a forecast.