A Forex Compounding Calculator is a sought-after tool among Forex traders, designed to project the potential growth of a trading account. It compounds gains based on a predetermined profit percentage per trade over a given time frame.
To estimate your Forex trading profits over a specific number of periods with a given gain percentage, follow these steps:
Input your initial trading account balance.
Specify the number of periods for compounding.
Enter your targeted gain percentage per trade.
Hit the 'Calculate' button to see the results instantly.
Formula: FV = P (1 + r/n)^(nt)FV = Future value of the investmentP = Initial deposit or principalR = Gain percentage per periodN = Frequency of compounding within a periodT = Total number of periods
Suppose you have an initial balance of $100 and an annual interest rate of 10%, compounded over 2 years. You would earn a $10 profit in the first year (on $100) and $11 profit in the second year (on $110), resulting in a total of $121.In contrast, a non-compounding investment would yield a final account balance of $120, as it would generate a fixed $10 profit each year.