Compound Interest Calculator
Built for trading accounts, not savings accounts. Work out the monthly return your win rate actually supports, then project how compounding grows it.
Free — no signup, no ads, instant results
Inputs
Results
Final Balance
$1,795.86
Total Profit
$795.86
Growth Multiplier
1.80x
Month-by-Month Breakdown
| Month | Start | Added | Profit | End Balance |
|---|---|---|---|---|
| 1 | $1,000.00 | $0.00 | +$50.00 | $1,050.00 |
| 2 | $1,050.00 | $0.00 | +$52.50 | $1,102.50 |
| 3 | $1,102.50 | $0.00 | +$55.13 | $1,157.63 |
| 4 | $1,157.63 | $0.00 | +$57.88 | $1,215.51 |
| 5 | $1,215.51 | $0.00 | +$60.78 | $1,276.28 |
| 6 | $1,276.28 | $0.00 | +$63.81 | $1,340.10 |
| 7 | $1,340.10 | $0.00 | +$67.00 | $1,407.10 |
| 8 | $1,407.10 | $0.00 | +$70.36 | $1,477.46 |
| 9 | $1,477.46 | $0.00 | +$73.87 | $1,551.33 |
| 10 | $1,551.33 | $0.00 | +$77.57 | $1,628.89 |
| 11 | $1,628.89 | $0.00 | +$81.44 | $1,710.34 |
| 12 | $1,710.34 | $0.00 | +$85.52 | $1,795.86 |
Who Is This For?
Traders and investors who want to see how their capital grows over time with consistent returns and optional monthly contributions. Useful for setting realistic growth targets and understanding compounding.
The Power of Compounding in Trading
Compound interest is the most powerful force in growing a trading account. By reinvesting profits, each month's gains are calculated on a larger balance, creating exponential growth over time.
Even modest monthly returns of 3-5% compound dramatically. A $1,000 account growing at 5% monthly reaches over $1,795 in just 12 months, nearly doubling without any additional deposits.
The key to compounding is consistency. GrandAlgo indicators help you find high-probability setups to maintain steady returns month after month. Learn how to build a consistent trading system that enables compounding.
From Win Rate to Monthly Return
Generic compound calculators ask you to invent a monthly rate. As a trader you can derive it from numbers you actually track. Expectancy per trade in R is: E = Win Rate × RR - (1 - Win Rate)
Example: a 45% win rate taking 2R winners gives 0.45 × 2 - 0.55 = 0.35R per trade. Risking 1% per trade over 20 trades a month, that is roughly a 7% monthly return before slippage and fees. That derived number is what belongs in the monthly return field, not a hope.
Because position size is a percentage of a growing balance, the compounding happens automatically: the same 1% risk is more dollars every month the account makes new highs. Use the Expectancy Calculator to get your E from a trade log first.
The Compound Growth Formula
The compound growth formula is: Future Value = Principal × (1 + Monthly Return)^Months
For example, $5,000 compounding at 5% monthly for 12 months: $5,000 × 1.05^12 = $8,979. That's a 79.6% annual return from "only" 5% per month.
The catch is consistency. A single -20% month wipes out roughly four +5% months due to the asymmetric nature of percentage losses. This is why protecting your capital during drawdowns is more important than chasing high monthly returns.
How to Use This Calculator
1. Enter starting balance
Input your current account balance or the amount you plan to start trading with.
2. Enter expected monthly return
Be realistic with this number. Consistently achieving 3-5% monthly is ambitious but achievable for disciplined traders with a proven strategy.
3. Enter time period in months
Set the number of months you want to project forward. Longer time horizons show the dramatic effect of compounding more clearly.
4. Read the projected balance and month-by-month breakdown
The calculator shows your projected final balance, total gain, and a detailed month-by-month table so you can track the compounding curve.
Worked Example
Step 1: Starting balance $5,000, monthly return 5%, monthly contribution $500.
Step 2: Time period 12 months. Total contributions = $11,000 ($5,000 + 12 × $500).
Step 3: Compounding at 5%/month on a growing balance with contributions.
Result: After 12 months: balance grows to approximately $17,336. Growth from compounding: $6,336 on top of the $11,000 contributed.
Compounding Inside a Prop Firm Challenge
Prop firm profit targets are usually 8-10% with no time limit on the better firms. At a modest 3.5% monthly return, compounding reaches 7.1% in two months and 10.9% in three. You do not need aggressive risk to pass, you need to survive the drawdown limit long enough for compounding to do the work.
Note that funded accounts reset the compounding base at every payout: withdraw profits and the balance returns to the starting size. Compounding only runs between payouts, which is why funded income scales with account size, not time. Model the challenge phase with the Prop Firm Simulator.
Assumptions & Edge Cases
- Assumes a fixed monthly return. Real returns vary.
- Does not account for drawdowns, losing months, or taxes.
- Monthly contributions are added at the start of each period.
- Compounding is monthly, not daily.
Frequently Asked Questions
A bank pays a fixed rate on a schedule. A trading account compounds through position sizing: if you risk a fixed percentage per trade, your position size grows with the account, so each win adds more dollars than the last. The rate is not guaranteed, losing months shrink the base, and the return depends on your win rate and reward-to-risk, not on an interest rate someone pays you.
Compound interest in trading means reinvesting your profits so that future returns are calculated on a growing balance rather than the original capital. If you make 5% on $10,000 in month one ($500 profit), month two’s 5% is calculated on $10,500, earning $525. Over time, this snowball effect dramatically accelerates account growth.
Consistently achieving 3-5% monthly returns is considered very good among professional traders. Strategies claiming 10-20% monthly returns are either extremely high-risk, not accounting for drawdowns, or not sustainable long-term. Use this calculator with conservative estimates to set realistic expectations.
Drawdowns are devastating to compounding because losses require proportionally larger gains to recover. A 20% drawdown requires a 25% gain to break even. A 50% drawdown requires 100%. This asymmetry is why risk management and consistent position sizing matter more than maximizing monthly returns.