Forex Compounding Calculator
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Forex Compounding Calculator is an investing calculator to calculate how much your money would grow with forex compounding based on the initial investment, growth rate, and the number of years holding the forex pair.
At the end of 30th year, your initial investment of 18000 would have grown into $231,254.28.
| Year |
Contributions |
Total Investment |
Interest |
Total Interest |
Ending Balance |
| 0 |
$0 |
$18,000 |
$0 |
$0 |
$18,000 |
| 1 |
$1,440.00 |
$19,440.00 |
$1,163.92 |
$1,163.92 |
$20,603.92 |
| 2 |
$1,440.00 |
$20,880.00 |
$1,325.36 |
$2,489.27 |
$23,369.27 |
| 3 |
$1,440.00 |
$22,320.00 |
$1,496.81 |
$3,986.08 |
$26,306.08 |
| 4 |
$1,440.00 |
$23,760.00 |
$1,678.89 |
$5,664.98 |
$29,424.98 |
| 5 |
$1,440.00 |
$25,200.00 |
$1,872.26 |
$7,537.24 |
$32,737.24 |
| 6 |
$1,440.00 |
$26,640.00 |
$2,077.62 |
$9,614.87 |
$36,254.87 |
| 7 |
$1,440.00 |
$28,080.00 |
$2,295.72 |
$11,910.58 |
$39,990.58 |
| 8 |
$1,440.00 |
$29,520.00 |
$2,527.33 |
$14,437.92 |
$43,957.92 |
| 9 |
$1,440.00 |
$30,960.00 |
$2,773.31 |
$17,211.22 |
$48,171.22 |
| 10 |
$1,440.00 |
$32,400.00 |
$3,034.53 |
$20,245.75 |
$52,645.75 |
| 11 |
$1,440.00 |
$33,840.00 |
$3,311.95 |
$23,557.71 |
$57,397.71 |
| 12 |
$1,440.00 |
$35,280.00 |
$3,606.57 |
$27,164.28 |
$62,444.28 |
| 13 |
$1,440.00 |
$36,720.00 |
$3,919.46 |
$31,083.74 |
$67,803.74 |
| 14 |
$1,440.00 |
$38,160.00 |
$4,251.75 |
$35,335.49 |
$73,495.49 |
| 15 |
$1,440.00 |
$39,600.00 |
$4,604.64 |
$39,940.12 |
$79,540.12 |
| 16 |
$1,440.00 |
$41,040.00 |
$4,979.40 |
$44,919.53 |
$85,959.53 |
| 17 |
$1,440.00 |
$42,480.00 |
$5,377.41 |
$50,296.93 |
$92,776.93 |
| 18 |
$1,440.00 |
$43,920.00 |
$5,800.09 |
$56,097.02 |
$100,017.02 |
| 19 |
$1,440.00 |
$45,360.00 |
$6,248.97 |
$62,345.99 |
$107,705.99 |
| 20 |
$1,440.00 |
$46,800.00 |
$6,725.69 |
$69,071.67 |
$115,871.67 |
| 21 |
$1,440.00 |
$48,240.00 |
$7,231.96 |
$76,303.63 |
$124,543.63 |
| 22 |
$1,440.00 |
$49,680.00 |
$7,769.62 |
$84,073.25 |
$133,753.25 |
| 23 |
$1,440.00 |
$51,120.00 |
$8,340.62 |
$92,413.87 |
$143,533.87 |
| 24 |
$1,440.00 |
$52,560.00 |
$8,947.02 |
$101,360.89 |
$153,920.89 |
| 25 |
$1,440.00 |
$54,000.00 |
$9,591.01 |
$110,951.90 |
$164,951.90 |
| 26 |
$1,440.00 |
$55,440.00 |
$10,274.93 |
$121,226.83 |
$176,666.83 |
| 27 |
$1,440.00 |
$56,880.00 |
$11,001.26 |
$132,228.09 |
$189,108.09 |
| 28 |
$1,440.00 |
$58,320.00 |
$11,772.62 |
$144,000.71 |
$202,320.71 |
| 29 |
$1,440.00 |
$59,760.00 |
$12,591.80 |
$156,592.51 |
$216,352.51 |
| 30 |
$1,440.00 |
$61,200.00 |
$13,461.77 |
$170,054.28 |
$231,254.28 |
What is Forex Trading?
Forex trading is to buy and sell currencies, and traders profit when the currency they buy goes up in value against another currency.
The Forex market operates 24 hours a day, 5 days a week worldwide. The Forex market has high liquidity and offers up to 50:1 leverage meaning a trader can build up his account quickly or get crushed quickly when using leverage.
How does the Forex market work?
In Forex trading, traders buy currencies in pairs. The 10 most traded currency pairs are EUR/USD, USD/JPY, GBP/USD, AUD/USD, USD/CAD, USD/CNY, USD/CHF, and USD/HKD.
You profit from the trade when you buy EUR/USD, and the Euro rises against the dollar.
The Forex market is bigger than the stock market because traders participate globally and the market doesn't close at night. The daily volume for the Forex market is close to $7 trillion.
What is compounding?
Compounding is an important concept in investing where money grows exponentially rather than linearly.
If you deposit your money into a savings account and get a 1% interest on your savings each year, your money grows slowly.
If you invest your money into stocks or the Forex and get a 5% return rate every year, and you reinvest your profits back into the market, your money grows exponentially. Compounding is when you make money with money.
Of course, that is not to say there are no risks involved. In fact, stock and the Forex market are risky and traders can lose all their money.
How to calculate Forex Compounding?
Following is the Forex compounding formula on how to calculate the returns from investing and trading.
A = P (1 + r/n)^(nt), where:
A = future value of your Forex investment
P = principal amount that you invested
r = annual growth rate
n = number of times that growth rate compounded per year
t = number of years the money is invested
Forex compounding example
Let's take a look at an example. Let's say you invest $10,000 in the Forex market and get a 6% return each year for 10 years.
Principal = $10,000
r = 6% growth rate
t = 10
n = 1
Plugin Forex compounding formula, and we have
A = P (1 + r/n)^(nt),
A = (10000)(1+0.06/12)^(12*10)
A = $17,908.48
As we can see, at the end of the 10th, the initial investment of $10,000 would have grown into $17,908.48 for a gain of almost 80%.
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