Compound Interest Calculator
See how compounding returns can grow your trading account over time with consistent monthly gains
Average percentage gain per month
Additional funds deposited each month (optional)
Compound interest in trading means reinvesting your profits so that each month you earn returns on a progressively larger balance. Unlike simple interest, where you only earn on your initial capital, compounding creates an exponential growth curve.
Simple vs Compound Example:
- Starting: $10,000 | Monthly return: 5%
- Simple (12 months): $10,000 + $6,000 = $16,000
- Compound (12 months): $10,000 x 1.05^12 = $17,959
- Difference: +$1,959 extra from compounding
The key is consistency. Even small monthly gains compound dramatically over time, which is why professional traders focus on steady returns rather than occasional large wins.
Formula:
Final = Principal × (1 + r)^n
r = monthly return (decimal)
n = number of months
Realistic Trading Scenarios:
Conservative (3% / month)
$10,000 → $14,258 in 12 months (+42.6%)
Moderate (5% / month)
$10,000 → $17,959 in 12 months (+79.6%)
Aggressive (10% / month)
$10,000 → $31,384 in 12 months (+213.8%)
- Keep risk per trade constant — As your balance grows, your position size grows proportionally. A 2% risk on $15,000 is larger than on $10,000.
- Withdraw profits periodically — Compound 80% and withdraw 20% to lock in gains and reduce psychological pressure.
- Focus on consistency, not big wins — A steady 3-5% monthly return compounded beats sporadic 20% months with drawdowns.
- Track your equity curve — Use a trading journal to monitor if your compounding trajectory stays on track.
- Beware of the drawdown trap — A 20% loss requires a 25% gain to recover. Protect capital above all else.