Dollar-Cost Averaging Calculator
See how investing a fixed amount on a regular schedule could grow under a steady assumed return, with the balance and the amount you have put in tracked period by period.
Dollar-cost averaging means investing a fixed amount on a regular schedule, no matter the price, so you buy more shares when prices are low and fewer when they are high. This calculator projects how a starting amount plus those steady contributions could grow at a constant assumed return, and tracks the balance against what you have contributed. It models one steady rate, not real market ups and downs, so read it as intuition, not a forecast.
Assumptions
- This models a CONSTANT periodic return: the same steady rate every period, not the real ups and downs of a market. Because of that, it cannot show the core mechanic of dollar-cost averaging in a volatile market, which is buying more shares when prices fall and fewer when they rise. Treat it as a smooth approximation for intuition, not a forecast.
- The annual return is converted to an exact effective rate per contribution period, so a monthly or annual schedule reconciles to the rate you enter. The starting amount is invested from the beginning and compounds every period.
- Contributions are a fixed amount each period, made at the start or end as you choose. A period-end contribution earns no return in the period it is made; a period-start contribution does. The balance and the cumulative amount contributed are tracked period by period for the chart.
- All figures are nominal (not adjusted for inflation), before taxes and investment fees. A negative assumed return is allowed and will produce a balance below what you contributed.
- Not modeled: real return variability and sequence-of-returns risk, share prices and partial shares, dividends, fees, and taxes. Because a constant rate replaces real volatility, this does not capture whether dollar-cost averaging beats investing a lump sum in any particular market. Every result is rounded to the nearest cent.
- This is an estimate for educational purposes only, not financial advice. Real markets vary every period, so actual results will differ, sometimes a lot.
How it works
Dollar-cost averaging means investing a fixed amount on a regular schedule. This calculator projects the balance under a single, constant return, period by period.
Each period, the balance earns the period’s return and the fixed contribution is added. With an end-of-period contribution (the default), the deposit earns no return in the period it is made:
balance = balance times (1 + r) + contribution
With a start-of-period contribution, the deposit is added first and earns that period’s return too:
balance = (balance + contribution) times (1 + r). The per-period rate r is the exact effective rate
from the annual return, (1 + return)^(1/k) − 1, where k is the number of contributions per year. The
starting amount is present from the beginning and compounds every period.
The calculator iterates period by period rather than using a closed form, so the chart can show the balance and the cumulative amount contributed at every step.
The key simplification
This models a CONSTANT return every period. A real market does not move that way, and that matters: the actual benefit of dollar-cost averaging comes from buying more shares when prices fall and fewer when they rise, which only happens when prices move. A constant-return model cannot show that mechanic. Read the projection as intuition about how steady investing compounds, not as a forecast and not as evidence about whether dollar-cost averaging beats investing a lump sum.
Worked example
Start with $1,000, add $200 a month, assume a 6 percent annual return, for 15 years (end of period):
- The effective monthly rate is 1.06^(1/12) − 1, about 0.4868 percent.
- Iterating 180 months gives an ending balance of about $59,779.
- Total contributed: $1,000 + ($200 times 180) = $37,000.
- Total growth: about $22,779.
A start-of-period contribution would end slightly higher, because every deposit earns one extra period of return.
Scope and limitations
Not modeled: real return variability and sequence-of-returns risk, share prices and partial shares, dividends, fees, and taxes. All figures are nominal. For a contribution plan that rises each year use the portfolio growth calculator; for compounding-frequency, inflation, and tax options use the compound interest calculator. This is an estimate for education, not financial advice.
Sources
- U.S. SEC, Investor.gov: dollar-cost averaging and automatic investing
- U.S. SEC, Investor.gov: investing basics
- Standard future-value-of-an-annuity math under a constant periodic return.
Frequently asked questions
- What is dollar-cost averaging?
- It is investing a fixed amount on a regular schedule regardless of price. Because the amount is fixed, you automatically buy more shares when prices are low and fewer when they are high, which can lower your average cost per share and removes the temptation to time the market. It is how most people invest through a paycheck or automatic transfer.
- Does this calculator model real market ups and downs?
- No. It uses one steady return every period, not real volatility. That keeps the projection simple and is fine for building intuition about how steady investing compounds, but it cannot show the actual share-buying mechanic of dollar-cost averaging, which only appears when prices move. For real outcomes, returns vary every period.
- Is dollar-cost averaging better than investing a lump sum?
- It depends on the market path, which this tool does not model. Historically, investing a lump sum right away has often beaten spreading it out, because markets tend to rise over time, but dollar-cost averaging reduces the risk of investing everything just before a drop and is easier to stick with. The right choice depends on your cash flow and comfort with risk.
- How is this different from the compound interest or portfolio growth calculators?
- The math is closely related; all project steady growth on contributions. This one is framed around the dollar-cost-averaging idea and tracks the balance period by period. Use the portfolio growth calculator for a contribution plan that rises each year, or the compound interest calculator for compounding-frequency, inflation, and tax options.
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Last reviewed June 2026.