What is dollar-cost averaging?

Dollar-cost averaging (DCA) means investing a fixed amount on a regular schedule — weekly, biweekly, monthly, quarterly, or annually — instead of investing a lump sum all at once. It smooths out the effect of buying at any single price.

How is the projected portfolio value calculated?

The calculator compounds your initial investment at the expected annual return, adding your recurring contribution at the end of each period (week, month, quarter, or year), then compounding the new balance again for the next period.

Does investment frequency change the result?

Yes. More frequent contributions (like weekly) compound slightly more often than less frequent ones (like annually) for the same total amount invested, which can produce a small difference in the final projected value.

Is the expected return guaranteed?

No. The expected annual return you enter is an assumption for projection purposes only. Real investment returns vary year to year and are never guaranteed — this tool shows a projection, not a prediction.

Dollar-cost averaging vs. lump sum — which is better?

Investing a lump sum immediately has historically outperformed DCA on average because markets tend to rise over time, but DCA reduces the risk of investing everything right before a downturn and can be easier to stick with using regular income.

Dollar-Cost Averaging Calculator — Free Online

About this calculator

A dollar-cost averaging calculator models buying a fixed dollar amount on a schedule and projects value under an assumed return.

Who should use it: Investors comparing lump-sum vs recurring purchase plans.

When to use it: Use it to illustrate contribution discipline — not to predict market paths.

Recurring contributions with compound growth

Balance = Balance × (1 + rate/periods per year) + contribution, repeated each period

Each period, the current balance grows by the expected annual return (converted to a per-period rate), then the recurring contribution is added at the end of that period — the same end-of-period convention used across CalcVo's growth calculators.

Step-by-step

Enter your starting investment
The lump sum you already have invested, or $0 if you are starting from scratch.
Set your recurring contribution and frequency
Choose weekly, biweekly, monthly, quarterly, or annually to match your investing schedule.
Enter your expected annual return
A long-term assumption, such as a historical stock market average.
Set the number of years
How long you plan to keep investing on this schedule.

Worked example: $5,000 start, $500 per month, 10 years

A $5,000 initial investment plus $500 invested monthly, growing at an expected 8% annual return for 10 years.

120 monthly contributions of $500 = $60,000 in new contributions
Total invested: $5,000 + $60,000 = $65,000
Growth compounds monthly at 8% ÷ 12 per period
Projected portfolio value: about $102,571

The portfolio grows to roughly $102,571 — about $37,571 more than the $65,000 actually invested.

How to interpret the result

DCA reduces timing risk versus a single lump sum but can lag lump-sum if markets trend upward steadily.

Key definitions

Dollar-cost averaging (DCA): Investing a fixed amount on a regular schedule rather than all at once.
Investment frequency: How often you contribute — weekly, biweekly, monthly, quarterly, or annually.
Expected return: An assumed average annual growth rate used for projection, not a guarantee.
Total growth: Projected portfolio value minus total amount invested — the projected investment gain.

Common use cases

Planning a recurring brokerage or retirement account contribution
Comparing how contribution frequency affects long-term projections
Setting expectations for a systematic investment plan
Estimating how a raise or new contribution amount changes the outcome

Tips

Small, consistent contributions compound significantly over long time horizons.
Use a conservative expected return for planning — markets do not grow in a straight line.
Increasing contribution frequency alone has a much smaller effect than increasing the contribution amount.

Common mistakes

Assuming the expected return is guaranteed every year

Fix: Treat the projection as a long-run average — real returns will vary year to year, sometimes sharply.

Ignoring fees, taxes, or inflation in the projection

Fix: This calculator shows gross growth only; account for fees, taxes, and inflation separately when planning.

Stopping contributions after a market downturn

Fix: Dollar-cost averaging is designed to keep investing through downturns, which lowers your average purchase price.

Limitations

Assumes a smooth return path; real prices are volatile.
Fees and taxes are simplified.