MCPCalc

Dollar Cost Averaging Calculator

Compare dollar cost averaging vs lump sum investment strategies.

Scratchpad (not saved)

$

Total amount you want to invest

Period over which to spread investments

%

Expected annual market return

years

Total investment horizon (including DCA period)

%

Return on uninvested cash during DCA period

What This Calculator Does

Analyze how recurring fixed investments accumulate shares over time and influence average purchase cost.

It combines Total Investment Amount, DCA Period, Expected Annual Return, Total Holding Period to estimate Better Strategy, Monthly DCA Amount, Lump Sum Final Value.

Formula & Method

Core equations: Lump-sum future value: FV_{lump} = I \times (1 + r_m)^{n} DCA invests a fixed amount each period, with uninvested cash earning a separate return. Monthly return from annual: r_m = (1 + r)^{1/12} - 1 The comparison shows the trade-off between market timing risk and immediate full exposure. Inputs are applied in base units, then derived metrics are computed from the same equations and rounded for display.

Notation used in the formulas: R = Better Strategy; x_{1} = Total Investment Amount; x_{2} = DCA Period; x_{3} = Expected Annual Return; x_{4} = Total Holding Period; x_{5} = Cash Return (while DCA).

Method summary: inputs are normalized to consistent units, core equations are evaluated, then secondary values are derived and rounded for display.

Use this when comparing periodic investing against lump-sum deployment under volatile price paths.

Inputs Used

  • Total Investment Amount: Total amount you want to invest
  • DCA Period: Period over which to spread investments
  • Expected Annual Return: Expected annual market return
  • Total Holding Period: Total investment horizon (including DCA period)
  • Cash Return (while DCA): Return on uninvested cash during DCA period

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