How it works
Compounding means profits are reinvested, so next month's return is earned on a bigger balance. Small consistent returns grow surprisingly far, which is also why a single large loss hurts the curve so much.
Treat the result as arithmetic, not a forecast. Real returns vary month to month, and a varying return always compounds to less than the same average return earned steadily.
Formulas
- Balanceₙ = Balanceₙ₋₁ × (1 + monthly return) + monthly deposit
- Profit = Final balance − Starting balance − Total deposits
Questions traders ask
Is 10% a month realistic?
Over a long period, very few traders sustain anything close. Use the calculator to see why: 10% a month compounds to over 3,000% in three years.