When profit stays in the account, it earns a return of its own in the next period. Compare this with simple interest, where the return applies only to starting capital. Negative rates are accepted.
You set the length of a period: a day, a week, a month or a year. Enter the return for that period and the number of periods, for example 30 days, 12 months or 5 years. Each period’s profit is added to capital and the next period is calculated on the new balance.
I understand this calculation is before fees, tax and inflation; those costs are not assumed to be zero, they are outside this model.
This model has no new deposits or withdrawals, and all returns stay in capital. To model cash flow and fees, use the “capital scenario with deposits and withdrawals” tool.