Dollar Cost Averaging Calculator
Calculate investment growth using dollar-cost averaging strategy.
Period Return = Annual Return / Periods per Year\nTotal Periods = Years * Periods per Year\nFuture Value = Payment * ((1 + r)^n − 1) / r\nTotal Invested = Payment * Total Periods\nTotal Return = Future Value − Total Invested
Example:\nInvestment: $500/month\nDuration: 10 years (120 months)\nReturn: 8% annually\n\nTotal Invested = $500 * 120 = $60,000\nFuture Value ≈ $91,473\nTotal Return ≈ $31,473\nROI ≈ 52.46%
What is dollar-cost averaging (DCA)?
Investing a fixed amount regularly regardless of market conditions. Reduces timing risk by buying more shares when prices are low, fewer when high.
Why use DCA instead of lump sum?
DCA reduces emotional decision-making and market timing risk. Good for investors who want to invest gradually or receive periodic income.
Is DCA better than lump sum investing?
Studies show lump sum often outperforms DCA long-term, but DCA reduces volatility risk and is practical for regular savers.
What return rate should I use?
Historical stock market average: ~10% annually. Conservative: 6-8%. Use realistic expectations based on your asset allocation.
Does this include fees?
No. Subtract investment fees, expense ratios, and taxes from your expected return for a more accurate projection.
🔗 Related Calculators
📐 Formula
Period Return = Annual Return / Periods per Year\nTotal Periods = Years * Periods per Year\nFuture Value = Payment * ((1 + r)^n − 1) / r\nTotal Invested = Payment * Total Periods\nTotal Return = Future Value − Total Invested
📝 Example Calculation
Example:\nInvestment: $500/month\nDuration: 10 years (120 months)\nReturn: 8% annually\n\nTotal Invested = $500 * 120 = $60,000\nFuture Value ≈ $91,473\nTotal Return ≈ $31,473\nROI ≈ 52.46%
❓ Frequently Asked Questions
What is dollar-cost averaging (DCA)?▼
Investing a fixed amount regularly regardless of market conditions. Reduces timing risk by buying more shares when prices are low, fewer when high.
Why use DCA instead of lump sum?▼
DCA reduces emotional decision-making and market timing risk. Good for investors who want to invest gradually or receive periodic income.
Is DCA better than lump sum investing?▼
Studies show lump sum often outperforms DCA long-term, but DCA reduces volatility risk and is practical for regular savers.
What return rate should I use?▼
Historical stock market average: ~10% annually. Conservative: 6-8%. Use realistic expectations based on your asset allocation.
Does this include fees?▼
No. Subtract investment fees, expense ratios, and taxes from your expected return for a more accurate projection.