Hypothetical growth — illustrative math, not a forecast.
Educational tool only — not financial advice. Verify figures with your broker.
The Compounding Calculator is a growth-projection tool that shows how a balance would change over a series of periods if a fixed percentage return were applied each period. It answers the hypothetical question 'if this exact rate repeated every period, where would the balance end up?' It is illustrative math, not a forecast.
Compounding uses the standard formula ending_balance = starting_balance x (1 + r)^n, where r is the return per period expressed as a decimal and n is the number of periods. Each period's gain is calculated on the new, larger balance rather than the original, which is what makes the growth curve accelerate over time.
A compounding calculator shows the hypothetical ending balance if a fixed percentage return were applied and reinvested each period. It illustrates the mechanics of compound growth, not an expected outcome.
Because compounding applies each period's return to an ever-larger balance, so gains build on prior gains. This also means the projection assumes an unbroken run of identical returns, which does not happen in real trading.
No. It projects one fixed assumption forward; real returns vary, include losing periods, and are affected by costs and drawdowns the model ignores.
Keep in mind: This is illustrative math, not a forecast: it assumes the same return repeats every period with no losing periods, no drawdowns and no costs, so the ending figure does not represent an expected or achievable result.