Compounding means applying each new change to the value after the previous change.
The formula
After n periods, the model value is initial × (1 + rate ÷ 100)^n. The table includes period zero and each subsequent balance. The period change is calculated before the next balance is formed.
Two-period example
Start with 1,000 and use 5% per period. Period one adds 50, giving 1,050. Period two adds 52.50 because it uses 1,050 as its base. The final value is 1,102.50, not 1,100.
Assumptions and limits
A constant entered rate is an assumption, not a forecast. The model excludes tax, fees, contributions and withdrawals. A rate of −100% reduces the balance to zero; it then stays zero. Overflow is rejected instead of producing an unusable table.
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