Forex compounding calculator
See how an account balance would grow if the same percentage return were added every period. The figures are hypothetical. It runs in your browser and nothing is stored.
Your numbers
See how an account could grow if profits are reinvested (). It is a what-if, not a forecast.
What you start with.
The same return every period. Be modest: this is the number that matters most.
The length of one period.
How long to run it, up to 600 periods.
+Add or take out money each period (optional)
Added at the end of each period. A minus sign is a withdrawal.
Daily figures use 252 trading days a year.
Your answer
Starting with $1,000.00 and earning 2% every month, you would have about $1,268.24 after 12 months. Because each month's profit is reinvested, you earn $28.24 more than if you took the profit out each time.
+$268.24 profit · 1.27× the money put in
- Deposits less withdrawals
- $0.00
- The same return over a year
- 26.8%
- Profit without reinvesting
- +$240.00
- Extra from compounding
- +$28.24
Hypothetical only. It assumes the same return in every period and ignores fees, swaps and taxes. Real results vary, and losses are possible.
+Show the working
- Each month, the balance grows by the return: new balance = old balance × (1 + 0.02).
- Month 1: $1,000.00 × 1.02 = $1,020.00.
- Month 2: $1,020.00 × 1.02 = $1,040.40.
- …and so on until month 12, which ends at $1,268.24.
- Shortcut when nothing is added: $1,000.00 × 1.02^12 = $1,268.24.
- Profit = final balance − money put in = $1,268.24 − $1,000.00 = $268.24.
- Without reinvesting, each month's profit would be a fixed share of the money put in, adding up to $240.00. The difference, $28.24, is what compounding adds.
- Per year: (1 + 0.02)^12 − 1 = 26.8%.
Period-by-period table
| Month | Start | Deposit | Profit | End |
|---|---|---|---|---|
| 1 | $1,000.00 | $0.00 | +$20.00 | $1,020.00 |
| 2 | $1,020.00 | $0.00 | +$20.40 | $1,040.40 |
| 3 | $1,040.40 | $0.00 | +$20.81 | $1,061.21 |
| 4 | $1,061.21 | $0.00 | +$21.22 | $1,082.43 |
| 5 | $1,082.43 | $0.00 | +$21.65 | $1,104.08 |
| 6 | $1,104.08 | $0.00 | +$22.08 | $1,126.16 |
| 7 | $1,126.16 | $0.00 | +$22.52 | $1,148.69 |
| 8 | $1,148.69 | $0.00 | +$22.97 | $1,171.66 |
| 9 | $1,171.66 | $0.00 | +$23.43 | $1,195.09 |
| 10 | $1,195.09 | $0.00 | +$23.90 | $1,218.99 |
| 11 | $1,218.99 | $0.00 | +$24.38 | $1,243.37 |
| 12 | $1,243.37 | $0.00 | +$24.87 | $1,268.24 |
For information only, not financial advice. Trading carries a high risk of loss. Results depend on the values you enter and on your broker's contract specifications. Risk disclosure
What compounding means
Compounding is growth on growth. When a gain is kept in the account instead of being withdrawn, the next period's return is earned on a bigger balance. Over a few periods the difference is small, but over many periods it becomes large.
The same arithmetic works against you when the return is negative. Losses reduce the balance that later gains are earned on, so a drawdown takes more than an equal percentage gain to repair.
How it is calculated
- Profit for a period = balance at the start of the period × the return per period.
- Balance at the end of the period = start balance + profit + any deposit (or − any withdrawal).
- With no deposits, the final balance = starting balance × (1 + return)^number of periods.
- Equivalent return per year = (1 + return per period)^periods per year − 1.
Worked examples
- $1,000 at 2% a month for 12 months: 1,000 × 1.02^12 = $1,268.24, a profit of $268.24. That is about 26.8% over the year.
- Without reinvesting, the same 2% of the original $1,000 would add $20 a month, or $240. The extra $28.24 is the effect of compounding.
- $1,000 at 1% a month with $100 added at the end of every month for 12 months: the balance ends at $2,395.08 after putting in $2,200.
How a monthly return turns into a yearly one
A return that looks small each month adds up quickly over a year. The table starts with $1,000 and shows the balance after 12 months at a steady monthly return.
| Return per month | Balance after 12 months | Equivalent per year |
|---|---|---|
| 1% | $1,126.83 | 12.7% |
| 2% | $1,268.24 | 26.8% |
| 3% | $1,425.76 | 42.6% |
| 5% | $1,795.86 | 79.6% |
Why these numbers are not a forecast
- Real returns are not steady. A trading account has winning and losing periods, and many traders lose money overall. The calculator uses one fixed return only to show how the arithmetic works.
- The bigger the return you enter, the less likely it is to be sustained. A return of 5% a month is already about 80% a year, which is rarely sustained for long.
- Costs reduce the result: spreads, commissions, swaps, withdrawal fees and taxes are not included.
- Trading with leverage can lose more than you expect, including more than you deposit on some accounts.
Losses compound too
| Loss from a peak | Gain needed to get back |
|---|---|
| 10% | 11.1% |
| 25% | 33.3% |
| 50% | 100% |
| 75% | 300% |
Frequently asked questions
+What is compounding?
Compounding means the profit from one period is added to the balance, so the next period's return is earned on a larger amount. A balance of $1,000 that gains 2% a month becomes $1,020 after one month, and the second month's 2% is worked out on $1,020, not on $1,000.
+How do I calculate compound growth?
Multiply the balance by one plus the return for each period. For 12 months at 2% a month, the balance is multiplied by 1.02 twelve times, so $1,000 becomes $1,000 × 1.02^12, which is about $1,268.
+Is a steady monthly return realistic?
No. Real trading results are uneven, with losing periods as well as winning ones, and many traders lose money. The calculator uses one fixed return only to show the arithmetic of compounding. It is not a forecast or a target, and a high return per period quickly becomes an unrealistic yearly figure.
+What happens if the return is negative?
Losses compound as well. A balance that loses 10% a period is worth 81% of its start after two periods. A 50% loss needs a 100% gain to get back to where you started, so losses are harder to recover than they look.
+Does this include fees, swaps and taxes?
No. Spreads, commissions, swaps, withdrawal fees and taxes would all reduce the result. The calculator shows the return you enter, before any of these costs.