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This content was prepared with an AI-assisted workflow (AI-assisted editorial workflow) for information only, not investment or tax advice. Actual tax and investment outcomes depend on account type, product structure, current rules, and personal circumstances.
What is dollar-cost averaging?
Dollar-cost averaging (DCA) is a strategy of investing a fixed amount at regular intervals regardless of market conditions. By spreading purchases over time, you reduce the impact of short-term volatility on your average cost basis. This calculator models monthly compounding growth on top of your initial lump sum and ongoing contributions.
How to read the results
The projected figures assume a constant annual return applied each month. Real markets fluctuate — returns will vary year to year, and past performance is not a guide to future results. Taxes and transaction costs are not included. Use these estimates as a starting reference, not a forecast.
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Method and limits
Formula
balanceₘ = balanceₘ₋₁ × (1 + r_month) + contribution ; r_month = (1 + annual_return)^(1/12) − 1
Worked example
Contributing 1,000 USD monthly for 30 years at an assumed 7% annual return gives a monthly rate of (1.07)^(1/12)−1 ≈ 0.565%, ending at roughly 1,169,000 USD against 360,000 USD contributed — about 69% of the balance is growth.
Assumptions
- Returns, yields, and inflation are assumed constant for the whole period at the value you enter. Real markets are not.
- All math runs in your browser; inputs are never sent to a server.
- Currency display uses a fixed exchange rate captured on the date below, not a live rate.
What is not included
- Taxes (dividend/capital gains), trading commissions, currency conversion costs
How to verify this yourself
- Put the same inputs into the formula above in a spreadsheet — you should reproduce these results exactly.
- If you find an error, tell us via the contact page and we will verify and correct it. Contact