What annual return should I assume?

A rate the strategy has actually delivered net of all costs, over a period long enough to include a bad regime. If the only evidence is a backtest, apply a substantial haircut — realised returns are routinely a fraction of backtested ones once slippage, fees, and behaviour are included.

Does this account for volatility and drawdowns?

No. It applies a constant rate, which no strategy delivers. Real paths have sequence risk: the same average return produces different outcomes depending on when the losses occur, and a deep early drawdown permanently reduces the base that compounds. Treat the projection as a smooth-case upper bound.

Why is monthly compounding used instead of annual?

Because contributions arrive monthly, and compounding them annually would understate their effect. The monthly rate is derived so that twelve of them equal the annual figure exactly, which keeps the no-contribution case identical to simple annual compounding.

Growth, with deposits kept honest

Compound Growth Calculator

Project account growth over time, with contributions reported separately from actual returns.

Updated 2026-08-18

A compound growth calculator projects what an account becomes when returns are reinvested rather than withdrawn. Convert the annual rate to a monthly one, apply it each month, and add any contribution before compounding the next period. The distinction this tool insists on is between money you deposited and money the strategy earned: $10,000 at 15% a year with $200 monthly for ten years reaches roughly $95,000, but $34,000 of that is deposits — the return did the rest, and reporting the total as performance would overstate it by a third.

Growth assumptions

Starting capital (USDT)

Annual return (%)

Use a rate the strategy has actually produced, net of fees

Years

Monthly contribution (USDT)

Set to 0 to see pure compounding without deposits

Runs entirely in your browser. No inputs are transmitted or stored.

Projection

Final value: —
Return earned: —
Total contributed: —
Starting capital alone: —
Final ÷ contributed: —

The most common error in projections is using a backtested return as the input. Backtested figures are gross of slippage, fees, funding, and the periods you would have stopped trading — subtract for all four before compounding the number for ten years.

The formula

Monthly rate = (1 + Annual %)^(1/12) − 1

For each of the 12 × Years months:
  Balance = Balance × (1 + Monthly rate) + Monthly contribution

Contributed   = Principal + Monthly × months
Profit        = Final value − Contributed
Principal only= Principal × (1 + Annual %)^Years

Contributions are savings, not returns — they are reported separately.

1 Enter your starting capital and the annual return you are assuming, net of costs.
2 Enter the projection horizon in years and any recurring monthly contribution.
3 Read the final value, then look at how much of it is deposits rather than return.
4 Re-run with a materially lower return to see how sensitive the projection is to that assumption.

Compounding rewards consistency over magnitude

A steady 15% compounds to about 4× over ten years; a strategy averaging 30% but losing 40% in one bad year lands lower despite the higher average, because recovering a 40% drawdown requires a 67% gain. This asymmetry is why systematic desks optimise for drawdown control rather than peak return: the geometric mean, not the arithmetic one, is what a real account experiences.

Why contributions are shown separately

Combining deposits with returns produces a curve that rises impressively while saying nothing about whether the strategy works. Separating them makes the honest question answerable: if the return line is small next to the contribution line, the account is growing because of savings discipline, and the strategy is at best not getting in the way.

Sources

2210. Communications with the Public — Financial Industry Regulatory Authority (FINRA)
Global Investment Performance Standards (GIPS) for Firms — CFA Institute
COBS 4.6 Past, simulated past and future performance (non-MiFID provisions) — Financial Conduct Authority (FCA)

Educational calculator. Outputs describe arithmetic under the assumptions you enter — they are not a forecast, a recommendation, or investment advice. Quantitative trading can lose money.

Frequently asked

Short answers, with the assumptions stated.

What annual return should I assume?: A rate the strategy has actually delivered net of all costs, over a period long enough to include a bad regime. If the only evidence is a backtest, apply a substantial haircut — realised returns are routinely a fraction of backtested ones once slippage, fees, and behaviour are included.
Does this account for volatility and drawdowns?: No. It applies a constant rate, which no strategy delivers. Real paths have sequence risk: the same average return produces different outcomes depending on when the losses occur, and a deep early drawdown permanently reduces the base that compounds. Treat the projection as a smooth-case upper bound.
Why is monthly compounding used instead of annual?: Because contributions arrive monthly, and compounding them annually would understate their effect. The monthly rate is derived so that twelve of them equal the annual figure exactly, which keeps the no-contribution case identical to simple annual compounding.

Take the number into a terminal that enforces it

Position caps, drawdown stops, and liquidation distance are limits QANTERION applies while a strategy runs — not figures you re-check by hand.

Start on paper — free See pricing