Trading compound interest calculator
See how your capital grows by reinvesting profits month after month at a target percentage return.
By the TradingCalculator.Pro team · Updated on · About us
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Formula
Final = Capital × (1 + monthly%)^monthsHow it works
Compound interest applied to trading is capital times (1 + monthly return) raised to the number of months. The difference from simple interest is not one of degree: reinvesting 3% a month, two years give 103.3% and not 72%, because each month works on what the previous one left.
The same formula that makes the projection attractive is what makes it dangerous as a promise. A sustained 3% a month is 42.6% a year, well above the S&P 500’s historical 10% and above what most professional funds achieve consistently. The formula does not lie; what usually lies is the percentage fed into it, and the one to feed it is the one from your real track record, not the one you would like.
What you get
- Compound growth with contributions
- Milestones and growth chart
- Realistic return expectations
Worked example
$10,000 of starting capital targeting a 3% monthly return, reinvesting everything, for 24 months.
- Formula: 10,000 × (1 + 0.03)^24.
- At 12 months: $14,257.61.
- At 24 months: $20,327.94.
- Accumulated gain: $10,327.94, i.e. 103.3%.
At 3% a month reinvested, $10,000 becomes $20,327.94 in two years.
Adding $200 a month at the same rate raises the 24-month result to $27,213.24: the contributions add $6,885.30, of which $4,800 is the money paid in and $2,085.30 is what that money compounded. On small accounts, contributing usually moves the result more than improving the percentage.
How to use it
- Enter your inputs: the terms of the formula (capital, risk, prices and stop).
- The calculator applies the formula and returns the result in your instrument's units.
- Check the breakdown before trading: anything that cannot be computed is shown empty, never as zero.
Frequently asked questions
What is $10,000 at 3% monthly compounded over two years?
$20,327.94, a 103.3% gain. The sum is 10,000 × 1.03^24, not 10,000 + 24 × 300, which would give $17,200. The $3,128 gap between the two ways of calculating it is exactly the compounding effect.
Is 3% a month realistic in trading?
It is 42.6% a year, and sustaining it over years is beyond what the vast majority of traders and funds achieve. As a projection exercise it is useful; as an expectation it is the figure that has ruined the most accounts, because reaching it means raising risk, and raising risk increases the probability of ruin far faster than it increases expected return.
What monthly return should I use in the projection?
The one from your real track record divided by the months you have been trading, and if you have no track record, none at all: project ranges instead of a number. A sustained 1% a month is already 12.7% a year, competitive with an index, and projected over five years multiplies capital by 1.82.
How do regular contributions enter the calculation?
They are added at the end of each period and compound from there like everything else. With $10,000 to start, 3% a month and $200 added monthly, the 24-month total is $27,213.24 against $20,327.94 without contributing. On a small account, regular saving weighs more than the percentage.
Does compounding work the same on the way down?
Yes, and that is why an optimistic projection misleads in both directions. Losing 3% a month for 24 months leaves $10,000 at $4,814, not $2,800: each loss applies to less capital. That same effect is what makes recovering harder than falling, and what justifies sizing by risk rather than by target.
How many months does it take to double the account?
At 3% a month, 23.45 months; at 2%, 35.0; at 1%, 69.7. It comes from dividing the logarithm of 2 by the logarithm of (1 + return). The rule of 72 — dividing 72 by the percentage — gives 24 months for 3% and is a convenient approximation, but it drifts the higher the return gets.