Try these example inputs in the DCA calculator.
These figures match this guide's worked example. They are illustrative. They stay on this device and never appear in the URL.
Dollar-cost averaging means adding the same amount on a schedule, usually every month, instead of investing that whole sum on day one. The comparison answers one question: under a single rate you choose, which schedule finishes higher?
Key takeaways
Monthly ending value = contribution × ((1 + monthly rate) ^ months − 1) ÷ monthly rate
Lump-sum ending value = (contribution × months) × (1 + monthly rate) ^ months
The monthly rate is the annual return divided by 12 when you choose nominal APR. If 8% is an effective annual return, the monthly rate is (1.08)^(1/12) − 1. Contributions arrive at the end of the month.
Add $500 at the end of each month for 1 year. The annual return is 8%.
The gap is the extra growth from having the full amount invested for all 12 months. Run it in the DCA calculator. Change the rate and the gap changes. At a 0% return the two ending values match, because nothing is growing.
That constant-rate model is not a falling market. A hypothetical price path, $500 a month, no return on cash sitting idle:
| Month | Price | Shares bought | Cumulative shares | Average cost |
|---|---|---|---|---|
| 1 | $100 | 5.00 | 5.00 | $100.00 |
| 2 | $80 | 6.25 | 11.25 | $88.89 |
| 3 | $90 | 5.56 | 16.81 | $89.25 |
The same $1,500 as a lump sum at month 1's $100 buys 15 shares. After month 3 those 15 shares are worth $1,350 at $90, while the monthly path holds 16.81 shares worth about $1,513. Later, cheaper purchases can finish ahead. The DCA calculator can paste a price path like this. It is an illustration you type, not a forecast.
Phasing in cash you already hold is a different decision from investing a paycheck as it arrives. The lump-sum column assumes the whole $6,000 was available on day one.
It shows the cost of waiting, when the return you typed is positive and steady. It is a schedule comparison, not a verdict about a stock.
Real prices do not rise by the same fraction every month. If the price falls while you are still buying, later shares are cheaper, and the monthly schedule can finish ahead. The constant-rate mode cannot show that on its own; the optional price path can. It still ignores taxes, fees, and dividends.
A starting balance plus ongoing contributions — not a pure lump-sum comparison — belongs on the compound growth page. A live price is a snapshot with an as-of date. It is not this schedule. Type the monthly amount in the DCA calculator.
For general education only. Nothing here is investment advice.
Formulas and worked examples are MarketCapLens's. See who checks the numbers.