Dollar-Cost Averaging (DCA) Calculator
The Dollar-Cost Averaging (DCA) Calculator helps you project the long-term growth of your investment strategy by making regular, fixed contributions regardless of market conditions. By investing a consistent amount at regular intervals, you reduce the impact of market volatility and avoid the pitfalls of trying to time the market. Use this free DCA calculator to see exactly how your wealth can grow over time based on your contribution amount, frequency, and expected annual return.
One-time lump sum invested at the start (optional).
Amount you invest each period (e.g. every month).
How often you make your recurring investment.
Total number of years you plan to invest.
Average annual rate of return (%). Historical S&P 500 average is ~10%.
Used to calculate the inflation-adjusted (real) ending value.
Your results will appear here
How to Use This Calculator
1. Enter an optional Initial Investment if you are starting with a lump sum. 2. Enter the Recurring Investment Amount you plan to contribute each period. 3. Select your Investment Frequency (weekly, bi-weekly, monthly, quarterly, or annually). 4. Set the Investment Duration in years to define your time horizon. 5. Adjust the Expected Annual Return slider to reflect your target or historical asset return. 6. Optionally set an Annual Inflation Rate to see the purchasing-power-adjusted result. 7. Review the results including your Future Portfolio Value, Total Gain, ROI, and Inflation-Adjusted Future Value.
What Is Dollar-Cost Averaging (DCA)?
Dollar-cost averaging is an investment strategy where you invest a fixed dollar amount at regular intervals — regardless of the asset's current price. When prices are low, your fixed amount buys more shares; when prices are high, it buys fewer. Over time, this averages out your cost per share and reduces the emotional burden of investing.
How the DCA Calculator Works
This calculator uses standard time-value-of-money formulas to project your portfolio's future value based on your inputs.
Future Value of a Lump Sum
If you provide an initial investment, its future value is calculated as:
- FVlump = P × (1 + r)n
- Where P = initial investment, r = annual return rate, n = number of years
Future Value of Recurring Contributions (Annuity Formula)
For periodic contributions, the future value is calculated using the ordinary annuity formula:
- FVrecurring = PMT × [((1 + r/f)f×t − 1) / (r/f)]
- Where PMT = periodic contribution, r = annual return, f = contribution frequency per year, t = years
Total Future Value
The total projected portfolio value is the sum of both components: FV = FVlump + FVrecurring
Inflation-Adjusted Value
To account for inflation, the nominal future value is discounted back using: Real Value = FV / (1 + i)t, where i is the annual inflation rate. This tells you what your future portfolio is worth in today's dollars.
Return on Investment (ROI)
ROI is calculated as: ROI = (Total Gain / Total Invested) × 100%. It measures how much profit you made relative to what you put in, not accounting for the time value of money.
Why DCA Works
- Reduces timing risk: You don't need to predict market tops or bottoms.
- Builds discipline: Automating contributions removes emotional decision-making.
- Harnesses compounding: Returns on returns over long periods create exponential growth.
- Lowers average cost: Buying more units when prices dip naturally reduces your average purchase price over time.