Compound Interest Calculator
See how your trading account can grow over time with the power of compounding.
Growth Parameters
⚡ Results update automatically as you type
Projected Growth
📊 Monthly Breakdown
The Power of Compound Interest
How It Works
Compound interest means you earn returns on your returns. Each month, your profits are added to your balance, and the next month's return is calculated on the new, larger balance.
Time is Key
The longer you compound, the more dramatic the growth. Albert Einstein allegedly called compound interest the "eighth wonder of the world."
Be Realistic
Consistent high returns are difficult to achieve. A realistic expectation is 2-10% monthly. Always account for losing months in your planning.
📐 Compound Interest Formula
A = P × (1 + r)^n A = $10,000 × (1 + 0.05)^12 = $10,000 × 1.7959 = $17,958.56
Compound vs Simple Interest
Compound Interest
Reinvesting profits each month
Simple Interest
Withdrawing profits each month
Frequently Asked Questions
What is compound interest in forex trading?
Compound interest in forex trading means reinvesting your profits back into your trading account instead of withdrawing them. By trading with your increased balance, your account grows exponentially over time. Our compound calculator helps you visualize this growth over any time period.
How do I calculate compound interest for trading?
Use our compound calculator by entering your starting balance, expected monthly return percentage, and time period. The formula is: Final Balance = Principal × (1 + Rate)^Periods. Our calculator automatically computes compound growth with optional monthly contributions.
What is a realistic monthly return for the compound calculator?
Professional traders typically aim for 2-5% monthly returns with proper risk management. While higher returns are possible, they come with higher risk. Be cautious of claims promising consistent 10%+ monthly returns - use realistic figures in the compound calculator.
Should I reinvest all my trading profits?
This depends on your financial goals. Many traders withdraw a portion (20-50%) of profits regularly while compounding the rest. Use our compound calculator to model different scenarios - full reinvestment vs. partial withdrawals - to find your optimal strategy.
Does the compound calculator account for losing months?
This compound calculator shows ideal growth with consistent returns. In reality, you'll have losing months. Use a lower average return rate (accounting for potential losses) to get a more realistic projection of your trading account growth.
How do monthly deposits affect compounding in forex?
Regular deposits accelerate compound growth significantly. Each deposit immediately starts earning compound returns, creating a "snowball effect." Use our compound calculator's monthly contribution feature to see how deposits boost your account growth.
What is the difference between simple and compound interest?
Simple interest is calculated only on the initial principal, while compound interest is calculated on principal plus accumulated interest. Our compound calculator shows both side-by-side so you can see the "compounding advantage" over time.
How long does it take to double my trading account?
Using the Rule of 72: divide 72 by your monthly return percentage × 12. At 5% monthly (60% annually), doubling takes about 14 months. Enter your expected return in our compound calculator to see exactly when you'll reach your target balance.
Can I use this compound calculator for any investment?
Yes! While designed for forex trading, our compound calculator works for any investment with regular returns - stocks, crypto, savings accounts, or any asset. Simply enter your expected return rate and time period for accurate projections.
How does compounding frequency affect trading returns?
More frequent compounding (daily vs. monthly) results in higher returns. In forex, profits compound with each winning trade. Our compound calculator uses monthly compounding by default, which is standard for projecting trading account growth.