Dollar-Cost Averaging Calculator

Model a steady investing plan — monthly, biweekly or weekly — and see how consistency plus compound growth adds up over time.

Starting with $5,000 and investing $500 every month at a 7% annual return could grow to about $96,591 in 10 years — $65,000 contributed by you and roughly $31,591 from investment growth. Dollar-cost averaging works by investing a fixed amount on a regular schedule, so you buy more shares when prices are low and fewer when they are high. Use this calculator to compare monthly, biweekly or weekly contributions over any time horizon.

Your plan

Calculations run in your browser. Inputs are not stored.

Initial investment

Contribution amount

Contribution frequency

Annual return

Illustrative assumptions only. Adjust the rate for your own model.

Time horizon

10 years

Estimated balance after 10 years

$96,591

You invested$65,000

Investment growth$31,591

ContributionsGrowth

Show yearly breakdown

Year	Contributions	Growth	Balance

The default 7% is an illustrative nominal annual return before inflation, not a forecast or a historical real return. If inflation adjustment is enabled, it is applied once to the nominal result. Do not subtract inflation again from an already real return.

How this calculation works

The formula

Each contribution is invested at the end of its period and compounds forward. The balance after N periods is:

FV = P · (1+i)^N + M · ( ((1+i)^N − 1) / i )

P = initial investment · M = contribution per period · i = rate per period · N = total number of periods.

Assumptions

Contributions are made at the end of each period and invested immediately.
The annual return is a nominal rate; results are pre-tax and pre-inflation.
The return rate is assumed constant — real markets fluctuate, and DCA's benefit is precisely that it smooths those fluctuations.
Fees, taxes, and inflation are not included.

View the formula →

Educational purposes only. Not financial advice. See the full methodology and disclaimer.

Worked examples

See how dollar-cost averaging performs across different scenarios. All examples assume a constant annual return — real markets will fluctuate.

Example 1: Steady monthly investing

Monthly contribution: $500 · Annual return: 7% · Time: 20 years

Final value

$260,463

You invested

$120,000

Growth

$140,463

Investing $500 every month for 20 years turns $120,000 of contributions into $260,463. 53.9% of the final balance comes from compound growth. DCA works because it removes the need to time the market — you invest consistently regardless of short-term price movements.

Example 2: Monthly vs weekly investing

Monthly: $500/month · Weekly: $115/week (~$500/month) · Annual return: 7% · Time: 20 years

Monthly $500

$260,463

Weekly $115

$261,537

Weekly investing edges out monthly by about $1,073 over 20 years — less than 0.5% difference. The reason: weekly contributions enter the market slightly sooner. In practice, your contribution frequency matters far less than your total contribution amount and time in the market. Choose a frequency that fits your cash flow.

Example 3: DCA vs lump sum (same total invested)

Lump sum: $120,000 invested today · DCA: $500/month for 20 years · Annual return: 7%

Lump sum $120k

$484,649

DCA $500/mo

$260,463

With a constant 7% return, lump sum wins by $224,185 because all $120,000 is compounding for the full 20 years. However, this assumes you have $120,000 today and the market never drops after you invest. DCA's advantage is behavioral: it reduces the risk of investing a large sum right before a market crash, which can be psychologically devastating. Many investors prefer DCA for peace of mind, even if the math slightly favors lump sum.

All examples are hypothetical and assume a constant annual return with no taxes, fees, or inflation. Actual investment results will vary. See full disclaimer.

Dollar-cost averaging, explained

What is dollar-cost averaging?

It means investing a fixed amount at regular intervals — say $500 a month — no matter what the market is doing. You buy more shares when prices are low and fewer when they're high, smoothing your average purchase price.

Does investing frequency matter?

At the same return, more frequent investing (weekly vs monthly) compounds marginally faster because money enters the market sooner. Over long horizons the difference is usually small compared to your return rate and time horizon.

Is DCA better than investing all at once?

Historically, lump-sum investing has on average outperformed DCA, because money spends more time in the market. But DCA reduces the risk of investing right before a downturn. Try our DCA vs Lump Sum calculator to see the pure math.

What's a realistic return to assume?

Long-run stock-market averages are often cited around 7–10% nominal. Use 4% for a conservative estimate. Past performance never guarantees future results.

Does DCA protect me from market crashes?

Partially. DCA reduces the risk of investing a large sum right before a crash, because you spread your purchases over time. If the market drops after your first few contributions, your later contributions buy more shares at lower prices. However, DCA does not eliminate market risk entirely — if the market declines steadily over your entire investment period, you will still lose money. DCA's main benefit is smoothing your average purchase price and reducing the emotional impact of market timing.

Who is dollar-cost averaging best for?

DCA is ideal for: (1) investors who don't have a large lump sum to invest at once, (2) people who invest a fixed portion of each paycheck, (3) nervous investors who worry about buying at the wrong time, and (4) anyone who wants a simple, disciplined investment strategy. If you already have a large sum available, studies show lump-sum investing usually outperforms DCA over long horizons — but DCA may still be the better choice if it helps you stay invested through market downturns.

What are the downsides of DCA?

The main downside is opportunity cost: money invested later misses out on earlier compound growth. In a steadily rising market, lump-sum investing will outperform DCA. DCA also requires more transactions (which may mean more fees, though many brokers now offer zero-commission trades), and it requires discipline to keep investing consistently even when the market feels scary. For most people, these downsides are outweighed by the psychological benefits of a simple, consistent strategy.