Compound Return Calculator
Compounding is returns earning returns. Over a few years a modest edge pulls far ahead of a linear one — and the same mechanism works in reverse, which is why a string of consistent losses is so hard to climb out of. This calculator projects a starting balance forward at a yearly return, with optional contributions.
Compounds once per year at a constant rate — a simplification. Real returns vary year to year, and a run of losses compounds against you the same way.
- • Each year, the balance grows by the return, then any contribution is added: balance × (1 + return) + contribution, repeated for the number of years.
- • Profit = final balance − everything you put in. Growth = final ÷ invested.
Worked example: $10,000 at 8% a year for 10 years, no contributions, grows to about $21,600 — more than double, from returns compounding on returns.
Uses a constant yearly rate — a simplification. Real returns vary year to year, and a big early loss compounds against you the same way gains compound for you. Educational tool, not advice.
A free, interactive calculator for any blog, newsletter or forum — same numbers as here, and it links back.
<iframe src="https://stratsemble.com/embed/tools/compound-return-calculator" width="460" height="430" style="border:0;border-radius:12px;max-width:100%" loading="lazy" title="Compound return calculator — Stratsemble"></iframe>A calculator shows what a rule should do on paper. A backtest is how you find the rare few that actually beat simply buying and holding — costs on, losses shown, no look-ahead — so when you build one that survives, you'll know it isn't a fake edge, and can prove it forward before you risk real money. It won't tell you you'll win — nothing honest can.