TSB
Compound Interest Calculator
See how your trading account can grow over time by reinvesting profits. The power of compound growth.
USD
%
months
USD
Compound Growth Projection
Final Balance
$17,959
after 12 months
Total Profit
$7,959
+79.59%
Avg Monthly
$663
profit
Growth Over Time
Double your money in
~15 months
$100k milestone
~48 months
The Power of Compound Growth
Compound interest is often called the "eighth wonder of the world." In trading, it means reinvesting your profits to grow your position sizes, leading to exponential account growth over time.
Final = Principal × (1 + Rate)^Periods
$10,000 at 5% monthly for 12 months = $10,000 × 1.05^12 = $17,959
Why Compounding Works
- Month 1: 5% of $10,000 = $500 profit → Balance: $10,500
- Month 2: 5% of $10,500 = $525 profit → Balance: $11,025
- Month 3: 5% of $11,025 = $551 profit → Balance: $11,576
- And so on... each month's profit is larger than the last
Reality check: These projections assume consistent returns, which rarely happens in trading. Losses, drawdowns, and emotional mistakes will impact your actual growth. Use this calculator for motivation and goal-setting, not as a guarantee.
Keys to Successful Compounding
- Consistency — Small, steady gains beat occasional big wins
- Risk management — A 50% loss requires 100% gain to recover
- Patience — The magic happens in year 2, 3, and beyond
- Don't withdraw early — Let profits compound
Frequently Asked Questions
What is compound interest in trading?
Compound interest in trading means reinvesting your profits to increase your position sizes over time. Instead of withdrawing gains, you trade with a larger account, so the same percentage gain produces more dollars.
How much can $1000 grow with compound interest?
$1,000 growing at 5% monthly becomes $1,796 after 12 months, $3,225 after 24 months, and $5,792 after 36 months. At 10% monthly (ambitious but possible), it becomes $3,138 after 12 months.
Is 5% monthly return realistic in trading?
5% monthly (60% annually) is aggressive but achievable for skilled traders. Many profitable traders average 2-5% monthly. However, consistency is key — losses and drawdowns will impact compound growth significantly.
How do you compound a trading account?
To compound: 1) Don't withdraw profits, 2) Increase position sizes proportionally as your account grows, 3) Maintain the same risk percentage (e.g., 1% per trade), 4) Stay consistent with your strategy.
What is the rule of 72 for trading?
The Rule of 72 estimates how long it takes to double your money: Years = 72 ÷ Annual Return. At 12% annually, doubling takes 6 years. At 60% annually (5% monthly), doubling takes about 14 months.
Track Your Actual Compound Growth
Projections are great, but reality matters. TSB Pro tracks your real equity curve and shows your actual compound growth rate over time.
Try TSB Pro Free