# Compound Growth Calculator > A compound growth calculator projects what an account becomes when returns are reinvested rather than withdrawn.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. Canonical HTML page: https://qanterion.com/tools/compound-growth-calculator Updated: 2026-08-18 ## 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. ``` ## Worked example (the page defaults) - Starting capital: 10000 USDT - Annual return: 15 % - Years: 10 - Monthly contribution: 200 USDT Result: - Final value: 92450.1 - Return earned: 58450.1 - Total contributed: 34000 - Starting capital alone: 40455.58 - Final ÷ contributed: 2.72× ## How to use it 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. ## Frequently asked ### 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. ## Related tools and reading - Kelly Criterion Calculator: https://qanterion.com/tools/kelly-criterion-calculator - Sharpe ratio & drawdown calculator: https://qanterion.com/tools/sharpe-ratio-calculator - How to read a backtest: https://qanterion.com/blog/read-backtest-risk - CAGR: https://qanterion.com/glossary/cagr - Quant Trading Glossary: https://qanterion.com/glossary - Crypto backtesting platform: https://qanterion.com/backtesting ## Sources - [2210. Communications with the Public](https://www.finra.org/rules-guidance/rulebooks/finra-rules/2210) — Financial Industry Regulatory Authority (FINRA) - [Global Investment Performance Standards (GIPS) for Firms](https://www.gipsstandards.org/wp-content/uploads/2021/03/2020_gips_standards_firms.pdf) — CFA Institute - [COBS 4.6 Past, simulated past and future performance (non-MiFID provisions)](https://handbook.fca.org.uk/handbook/cobs4/cobs4s6) — Financial Conduct Authority (FCA) ## Other languages - 简体中文: https://qanterion.com/zh/tools/compound-growth-calculator - 繁體中文（台灣）: https://qanterion.com/zh-TW/tools/compound-growth-calculator - 繁體中文（香港）: https://qanterion.com/zh-HK/tools/compound-growth-calculator - 日本語: https://qanterion.com/ja/tools/compound-growth-calculator - 한국어: https://qanterion.com/ko/tools/compound-growth-calculator - Português (Brasil): https://qanterion.com/pt-BR/tools/compound-growth-calculator - Türkçe: https://qanterion.com/tr/tools/compound-growth-calculator - Bahasa Indonesia: https://qanterion.com/id/tools/compound-growth-calculator - العربية: https://qanterion.com/ar/tools/compound-growth-calculator ## Machine-readable resources - Product facts: https://qanterion.com/llms.txt - Full knowledge base: https://qanterion.com/llms-full.txt - All calculators: https://qanterion.com/tools ## Risk notice 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.