DCA Calculator
Project your portfolio growth with consistent monthly investing
Enter Investment Data
Free · No sign-up · Updates as you type$
How much you invest each time.
yrs
Years to invest (1–50)
Expected annual return rate (e.g. 8 for 8%)
The shape of the market along the way. It does not change your expected return above, only when your regular buys land, which is the whole point of averaging. Standard market is a normal mix of ups and downs.
What your plan grows to
$287,403
$120,000 invested over 20 years (+139.5%)
In plain terms: you invest $500 a month for 20 years, putting in $120,000 of your own money. Growing about 8% a year, that becomes $287,403, of which $167,403 is growth on top of what you put in.
Spread it out, or invest it all at once?
The same total money, invested two ways: dripped in over the whole period (DCA), or invested in full on day one (lump sum).
Spread over time (DCA)
Final value
$287,403
Total return
+139.5%
All on day one (lump sum)
Final value
$559,315
Total return
+366.1%
Investing it all on day one came out ahead by $271,912 in this scenario. Historically, investing it all at once wins about two thirds of the time in rising markets, because the money is in the market sooner. Spreading it out mainly protects you from investing right before a fall.
Portfolio value over time
Year-by-Year Projection
| Year | Contributions | Total Value |
|---|---|---|
| 1 | $6,000 | $6,375 |
| 2 | $12,000 | $12,665 |
| 3 | $18,000 | $21,531 |
| 4 | $24,000 | $25,716 |
| 5 | $30,000 | $32,773 |
| ... | ||
| 16 | $96,000 | $174,356 |
| 17 | $102,000 | $217,023 |
| 18 | $108,000 | $225,236 |
| 19 | $114,000 | $258,839 |
| 20 | $120,000 | $287,403 |
This calculator uses the future value formula to project growth from regular monthly contributions. FV = PMT × [((1+r)^n − 1) / r] × (1+r) + lump_sum × (1+r)^n, where r is the monthly rate (annual rate ÷ 12) and n is the total number of months.
FV = PMT × [((1+r)^n − 1) / r] × (1+r) + Lump × (1+r)^n
Step 1: Enter your monthly contribution - the fixed amount you plan to invest each month consistently.
Step 2: Enter an optional lump sum if you have existing capital to invest upfront today.
Step 3: Set the expected annual return (the S&P 500 has returned ~8% net of inflation historically) and the investment period, then click Calculate.
What Is Dollar Cost Averaging and Why It Works
Dollar cost averaging (DCA) means investing a fixed amount at regular intervals - every month, regardless of market conditions. When prices fall you buy more shares for the same amount. When prices rise you buy fewer. Over time this lowers your average purchase cost compared to trying to time the market.
Research consistently shows that even professional investors cannot reliably beat the market. DCA removes the temptation to wait for the perfect entry point - a temptation that historically leads to buying high and selling low. Discipline is the most durable edge an ordinary investor holds over the market.
DCA vs. Lump Sum: Which Strategy Is Better?
Studies show that investing everything at once (lump sum) outperforms DCA in rising markets roughly 66–70% of the time, simply because markets go up more often than they go down. However, DCA reduces timing risk: if you invest a large sum just before a crash, DCA would have produced a better outcome. For those receiving regular income, DCA is the natural and automatic choice.
The real strength of DCA is not beating the market - it is removing emotion from the decision. An automated DCA plan ensures you invest during downturns, when human instinct screams to stop. This behavioural discipline is worth more than any timing optimisation.
The Compounding Effect of Consistency
$500 per month for 30 years at an 8% annual return produces a portfolio of approximately $750,000 - against $180,000 in total contributions. 76% of the final wealth comes from returns on returns, not the capital contributed.
Starting early matters more than the starting amount. Investing $200 per month for 40 years ($96,000 total) at 8% produces more wealth than investing $500 per month for 25 years ($150,000 total). Time in market beats money in market.
Related Tools
For modelling dividend reinvestment on top of regular contributions, use this DCA calculator alongside our Compound Interest Calculator. To model a fixed recurring investment plan popular in South Asian markets, see our SIP Calculator. Once your portfolio grows, use the Portfolio Rebalancing Calculator to keep your allocation aligned with your targets.
Frequently Asked Questions
Dollar cost averaging is an investment strategy of investing fixed amounts at regular intervals regardless of market price. When prices drop you buy more shares; when prices rise you buy fewer. Over time this lowers your average purchase cost and reduces the impact of market volatility.
Monthly is the most practical frequency for most investors, aligned with salary cycles. Consistency matters more than frequency - a monthly plan maintained for years beats a weekly plan abandoned after six months.
DCA is particularly advantageous in bear markets: you buy more shares at lower prices. Every historical bear market has been followed by recovery. Investors who continue DCA during downturns end up buying at the lowest prices, maximising gains in the rebound.
The S&P 500 has returned approximately 10% gross annually historically, or ~8% net of inflation. Actual returns vary significantly across any 10-year period. Use 7–8% for conservative long-term projections.
For a deeper look at investor psychology and why DCA works so well for ordinary investors, read our article: Investor Psychology: How Emotions Destroy Returns
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