Dollar-Cost Averaging (DCA) Calculator
Project investment growth using fixed periodic contributions and average annual returns.
What this calculates
Dollar-cost averaging buys the same dollar amount at regular intervals — more shares when prices drop, fewer when they rise. Over decades, this smooths entry timing and harnesses compounding. This calculator assumes a constant average return; real markets are volatile.
Formula & how it works
FV = PMT × [((1 + r/n)^(n×t) − 1) ÷ (r/n)], where PMT = periodic contribution, r = annual return, n = periods/year, t = years. Total invested = PMT × n × t.
Worked example
$500/month for 25 years at 7% average annual return: total invested $150,000, projected ending value $407,000. Compounding contributes $257,000.
Frequently asked questions
Is DCA better than lump-sum?
Historically lump-sum wins ~66% of the time because markets trend up. DCA wins in falling/sideways markets and is psychologically easier.
What return should I use?
S&P 500 long-run average is ~10% nominal / 7% real. Use 5-7% for conservative planning.
Inflation?
Subtract ~3% from your return assumption to get a real (purchasing-power) result.
Disclaimer: Educational only. Past returns don't guarantee future results.
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