Risk & Money Management
Compounding & Drawdown Recovery Calculator
Project account growth from a per-period return and number of periods, with optional contributions — plus the gain needed to recover any drawdown.
Final balance
$20,398.87
- Total contributed
- $10,000.00
- Total growth
- $10,398.87
- Drawdown recovery
- 25%
How this is calculated
With no contributions, a balance compounds as final = principal × (1 + r)^periods. Each period earns on the previous period's gains, which is why the curve bends upward.
Recovering a drawdown takes a larger gain than the loss itself, because the loss shrinks your base: recovery = d ÷ (1 − d). A 50% loss needs a 100% gain to return to even.
Frequently asked questions
- How does compounding work?
- Each period the balance grows by the return rate: final = principal × (1 + r)^periods. Reinvested gains earn their own gains, which is the compounding effect.
- Why does drawdown recovery take more than the loss?
- A loss shrinks the base you grow from. Recovering a drawdown d requires a gain of d ÷ (1 − d): a 50% loss needs a 100% gain to get back to even.