Dollar-Cost Averaging Calculator
Dollar-cost averaging means investing a fixed amount on a regular schedule rather than all at once, so the money buys more units when prices are low and fewer when they are high. It changes when the money goes in, not whether the asset itself rises — the end value still depends on where the price finishes and on how much cash sat waiting on the sidelines along the way.
Future value of a regular contribution C made n times at a per-period return r = C × [((1 + r)ⁿ − 1) ÷ r]. The lump-sum comparison invests the same total, C × n, for the whole horizon instead — so the gap between them is the return the un-invested cash gave up while it waited.
Worked example: Paying in $200 a month for 10 years (120 contributions) at roughly 0.5% a month lands near $33,000 on $24,000 put in. Putting that same $24,000 in as one lump sum at the start keeps the whole balance compounding for the full decade, rather than feeding it in gradually — so the gap between the two outcomes is simply the return the un-invested cash earned, or missed, while it waited its turn.
A projection at a constant assumed rate, not a forecast — real returns arrive in a bumpy, unknowable order. Educational tool, not advice.
At a rising assumed return, lump sum ends ahead — its whole balance compounds for the full time, while DCA holds cash on the sidelines that hasn't been invested yet. That gap is the real cost of averaging in. A constant assumed rate is a simplification: real returns arrive in a bumpy, unknowable order, and this projects — it does not predict.
Most dollar-cost-averaging tools quietly cheer the habit; the honest picture is a two-sided trade-off. Spreading the money in caps the regret of putting everything in right before a fall, but it also leaves cash sitting on the sidelines, and that waiting has a cost when prices climb. Which side comes out ahead over a given horizon — and the research behind it — is set out in the DCA versus lump sum study, not decided by this calculator.
How is the future value of regular contributions projected?
Each contribution compounds for the periods remaining after it is made, and the calculator sums them — equivalent to C × [((1 + r)ⁿ − 1) ÷ r] at a constant per-period return r. It is an annuity projection at a fixed rate, so it smooths over the bumpy, uncertain order in which real returns actually arrive.
What is the difference between dollar-cost averaging and a lump sum?
Timing. Averaging in feeds the same total in gradually while a lump sum invests it all at once; the lump sum keeps its whole balance compounding for the full horizon, whereas averaging in leaves part of the money in cash waiting its turn. The gap between the two outcomes is simply the return that waiting cash did or did not miss.
When does dollar-cost averaging come out ahead?
When the market falls over the horizon, because feeding the money in slowly keeps more of it out of the decline; when it rises, the cash still waiting to be invested is the cost of averaging in. Which effect dominates over a given period, and why averaging in still earns its place for money saved from each paycheck, is laid out in the DCA versus lump sum study.
The full comparison — which one actually wins, with the research and the numbers — DCA vs lump sum: what actually wins.
A free, interactive calculator for any blog, newsletter or forum — same numbers as here, and it links back.
<iframe src="https://stratsemble.com/embed/tools/dca-calculator" width="460" height="540" style="border:0;border-radius:12px;max-width:100%" loading="lazy" title="DCA calculator — Stratsemble"></iframe>A calculator shows what a rule should do on paper. A backtest is how you find the rare few that actually beat simply buying and holding — costs on, losses shown, no look-ahead — so when you build one that survives, you'll know it isn't a fake edge, and can prove it forward before you risk real money. It won't tell you you'll win — nothing honest can.