The effect of compounding

Hi there,

I was wondering if anyone knew how to calculate the effect of compounding on a trading system's results.

I have been working on a system for a number of years, the returns are unspectacular but very consistent. On average it generates 8 trades a day with a success rate of just under 65% and an average is just under 0.5% per trade (after costs and commissions).

So for simplicity lets say 2000 trades a year with 0.5% return on average. Each trade being 1.25% of my capital, compounding.

I know about the powerful effect of compounding, but not sure how to calculate the effect of it on my annual returns if the results were as detailed above?

Can anyone smart help please?

Many thanks

The effect of compounding