How to use the Compounding Calculator
- Enter the starting balance.
- Set a return per period that matches your test period.
- Choose the number of periods.
- Add a recurring contribution if you want to model deposits.
- Compare ending balance, total added, and profit.
Formula
New balance = Previous balance x (1 + Return %) + Added amount
Total profit = Ending balance - Starting balance - Total addedExample
A $10,000 account compounding 3% for 12 periods with no additions ends near $14,257.61 before withdrawals, taxes, and trading costs.
What to watch
- Compounding is a projection, not a forecast.
- Losing periods interrupt the curve and should be modeled separately when stress-testing.
- Do not use optimistic return assumptions to justify excessive position size.
Frequently asked questions
What is a period?+
A period can be a day, week, month, challenge phase, or trade batch. Keep return and period count consistent.
Does this include withdrawals?+
No. Use a negative return assumption or calculate a separate withdrawal plan if needed.
Why does profit accelerate?+
Each return is applied to the new balance, so gains can earn future gains when left in the account.