Dollar-Cost Averaging Calculator
See how investing a fixed amount regularly builds wealth over time — and how it compares to investing a lump sum.
Dollar-cost averaging (DCA) means investing a fixed amount at regular intervals regardless of market price. Investing $500/month in an index fund returning 8%/year for 20 years turns $120,000 of contributions into over $294,000. DCA removes the pressure to time the market.
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DCA Calculator
Regular investment · Period · Expected return · DCA vs lump-sum comparison
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Your DCA plan
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Results
Total invested (DCA)
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Final DCA balance
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DCA total return
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Lump-sum balance same amount invested on day 1
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Interest & gains earned
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How it's calculated
DCA: future value of a regular annuity
DCA is mathematically equivalent to the future value of an annuity — a series of equal payments at regular intervals, each compounding for a different number of periods.
DCA Final Value = PMT × [(1 + r/n)^(n×t) − 1] / (r/n)
Lump-Sum Final Value = L × (1 + r)^t
Where PMT = periodic payment, r = annual rate, n = periods/year, t = years, L = lump sum
- 1Total contributed—
- 2DCA final value—
- 3Lump-sum comparison—
- Dollar-cost averaging (DCA)
- Investing a fixed amount at regular intervals regardless of market price. Automatically buys more shares when prices are low and fewer when high.
- Lump-sum investing
- Investing the entire amount at once. Statistically outperforms DCA in rising markets (~2/3 of the time), but carries higher sequence-of-returns risk.
- Annuity
- A series of equal payments at regular intervals. DCA is a growing annuity when you increase contributions over time.
Disclaimer: this calculator assumes a constant rate of return. Real market returns are volatile and unpredictable. DCA does not guarantee a profit or protect against loss in declining markets.
Frequently asked questions
What is dollar-cost averaging?
DCA is investing a fixed amount at regular intervals regardless of market price. When prices fall, your fixed amount buys more shares; when prices rise, it buys fewer. Over time this produces an average cost per share that is often lower than the average price, and it eliminates the need to time the market.
Does DCA beat lump-sum investing?
In trending-up markets, a lump-sum invested on day 1 outperforms DCA about 2/3 of the time (Vanguard research, 2012). However, most people receive income periodically — so DCA is the natural strategy. It also drastically reduces the risk of investing everything right before a crash.
What's the best frequency for DCA?
Monthly aligns with most salary cycles and is practical. Weekly DCA produces marginally better risk reduction (more price diversification), but the difference is small. The key is consistency — pick a frequency you can maintain for years.
Can I DCA into ETFs and index funds?
Yes — DCA is the standard recommendation for index fund investing. Most brokerages allow automatic monthly investments with no transaction fees. For ETFs, check whether your broker offers fractional shares or scheduled purchases.