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Forex Compounding Calculator

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Thumbnail image of Alastair Hazell By Alastair Hazell. Reviewed by Chris Hindle.
Note: Daily compounding means interest is compounded for 365 days/year. To exclude weekends, please use the daily compounding calc

Use the forex compound calculator to calculate the profits you might earn on your foreign exchange currency trading.

Disclaimer: Whilst every effort has been made in building our calculator tools, we are not to be held liable for any damages or monetary losses arising out of or in connection with their use. Full disclaimer.

Calculating forex earnings

To calculate the profits from your forex trading, we enter your starting balance, percentage and number of months into the formula for compound interest. The calculation returns a compounded projection figure for future earnings, to guide you as to what profits you might see from your foreign exchange trading.

Note that calculations using the Forex Compounding Calculator assume that any additional contributions are made at the end of the period.

What is forex trading?

Forex trading involves buying and selling currencies in the foreign exchange market, a decentralized global market for currency trading. The last decade has seen a rise of online currency trading platforms, helping individuals trade currencies with the aim of trying to make a profit.

Multiple currency options

Whether the base currency for your trading is US dollar, UK pound, Euro or any other currency, you'll find our forex compounding calculator works for you. If you're trading in cryptocurrency or any currency whose symbol isn't represented, simply select the blank square in the currency options.

See also: Systematic Investment Calculator | APY Calculator | CAGR Calculator

Example forex compound calculation

Let's say that you begin your forex currency trading with a balance of $2,000 and you're looking for a projected profit of 5% per month. To calculate a projection for earnings after 12 months, your calculation might look like this:

  • Principal (P) = 2000
  • Rate as decimal (r) = 5/100 = 0.05
  • Time in months (t) = 12

Adding these into our compounding formula:

A = P(1+r)t

A = 2000 × (1+0.05)12

A = 2000 × 1.7958563260221

A = 3591.7126520443

A = $3,591.71

To get a figure for profits or earnings, we deduct the principal amount ($2000) from our calculation result. This means that the compounded profit/earnings projection for your forex trading works out to be $1591.71.