DCA Investment Calculator
Investing a fixed amount every month? Project your future portfolio in seconds — total invested, market gains, tax, and what it's really worth after inflation. Works in any currency.
Presets are illustrative examples only, not a guaranteed return.
Future portfolio (after tax)
Some values were above the allowed range and were capped for this calculation.
Contributions are assumed at the start of each month (annuity-due); returns compound monthly.
Every calculation runs in your browser — nothing is sent to a server.
This is an arithmetic projection, not investment advice; returns vary and are not guaranteed.
Understanding dollar-cost averaging
Dollar-cost averaging (DCA), also called a systematic investment plan (SIP), means investing a fixed amount on a regular schedule — usually monthly — instead of committing one lump sum at a single moment. The appeal isn't a mathematical edge over lump-sum investing; long-run studies generally show lump sum winning more often simply because markets rise more years than they fall. DCA's real value is behavioral: it removes the need to guess whether today is a good day to buy, and it matches how most people earn money — a paycheck at a time, not as one windfall. This calculator projects where a fixed monthly plan lands after years of compounding, so you can see the destination before committing to the habit.
Reading the inputs
- Initial investment — any lump sum you're starting with; leave at 0 if starting from scratch.
- Monthly investment — the fixed amount contributed every month, assumed to land at the start of each month.
- Expected annual return — one assumed yearly growth rate for the whole horizon. The 4/7/10% chips are reference points, not forecasts.
- Time horizon — how many years the plan runs before cashing out.
- Inflation — optional; discounts the result into today's purchasing power without changing the nominal projection.
- Capital-gains tax — optional; applied to the profit portion only, assuming one sale at the end of the horizon.
The formula behind the projection
Each monthly contribution is its own deposit that compounds until the end
of the horizon. With m = annual return ÷ 12 and n = years × 12 months, the
projected balance is:
Future value = initial × (1 + m)n + monthly × (1 + m) × [(1 + m)n − 1] ÷ m
The extra (1 + m) factor on the monthly term exists because
each contribution is assumed to land at the start of its month (an "annuity-due"), so it
earns one extra month of growth compared to a plan where money arrives at month-end.
Worked examples
Example 1 — starting from zero. $0 initial, $500/month, 7% expected return, 20-year horizon, no inflation or tax entered.
Total invested: $120,000 (500 × 240 months). Projected balance: $261,982. Market gains: $141,982 — that's 54% of the final balance, meaning slightly more than half of what you'd end up with came from growth, not from your own contributions.
Example 2 — with a head start, inflation and tax. $10,000 initial, $300/month, 6% return, 30 years, 3% inflation, 15.4% capital-gains tax (Korea preset).
Total invested: $118,000. Pre-tax balance: $363,087, of which $245,087 is gains (68% of the total). Tax on those gains: $37,743, leaving $325,344 after tax. Discounted for 30 years of 3% inflation, that's worth about $134,037 in today's purchasing power — under half the headline number, which is why the "value in today's money" line matters for long horizons.
Why the gain share accelerates over time
Run the same $200/month at 8% for different horizons and the split between your own money and market gains shifts sharply — not because you're contributing more per year, but because earlier dollars simply have more years left to compound.
| Horizon | Total invested | Market gains | Gains share of balance |
|---|---|---|---|
| 10 years | $24,000 | $12,833 | 35% |
| 20 years | $48,000 | $70,589 | 60% |
| 30 years | $72,000 | $228,059 | 76% |
DCA and your average cost per share
This calculator assumes a smooth annual return, but in real markets the price of whatever you buy moves around, and that's where dollar-cost averaging earns its name. Because you spend the same dollar amount each period, you automatically buy more units when the price is low and fewer when it's high — so your average cost per share ends up below the simple average of the prices you bought at. Suppose a fund trades at $50, $40, $62.50, then $50 over four months and you invest $100 each month: the simple average price is $50.63, but you'd end up with 8.1 shares for your $400 — an average cost of $49.38 per share, lower than every one of those four prices except the cheapest month. That gap between "average price" and "average cost" is the mechanical benefit of buying on a fixed schedule regardless of price, separate from — and smaller than — the compounding return this tool projects.
Common mistakes
- Treating the preset return as a promise. 7% is a historical reference for broad index funds after inflation, not a guarantee.
- Ignoring the real-value line. A nominal number decades out can look impressive while buying far less once inflation is factored in.
- Assuming DCA always beats a lump sum. Historically a lump sum invested immediately has outperformed spreading it out more often than not, since markets trend upward more years than they decline — DCA's edge is discipline and reduced regret, not a higher expected return.
- Forgetting fees. Fund expense ratios and trading costs aren't modeled here and will quietly reduce any real-world result versus this projection.
Limitations
The projection assumes one constant annual return and one constant monthly contribution for the whole horizon — real portfolios see year-to-year swings, contribution changes, and sequence-of-returns risk (a downturn late in the horizon hurts more than one early on, even at the same average return). This is an arithmetic projection for comparing scenarios, not investment, tax, or financial advice — confirm assumptions like tax rate and expected return against your own situation before acting on them.
Sources & further reading
Frequently asked questions
How does dollar-cost averaging (DCA/SIP) turn a monthly amount into a big number?
Dollar-cost averaging means investing a fixed amount every month instead of one lump sum. This DCA calculator treats each monthly contribution as its own deposit that then compounds at your expected annual return until the end of your horizon. Mathematically it is an annuity-due future value: contributions land at the start of each month, the monthly rate is your annual return divided by twelve, and money invested earlier compounds for more months. Add any one-off starting amount and you get the projected balance. Because early contributions have decades to grow, the final figure is usually far larger than the plain total you paid in — that gap is the compounding this SIP calculator makes visible.
Why are the 4%, 7% and 10% return presets illustrative only?
The expected return is an assumption you choose, not a rate anyone can promise. The presets are round reference points often cited for broad index funds — for example the S&P 500 has averaged roughly 7% a year after inflation and around 10% before inflation over long history, and 4% is a more cautious figure. Real markets do not deliver a smooth annual number: some years are strongly positive, others negative, and past averages never guarantee the future. Treat every result here as one scenario. To stress-test a plan, run it again with a lower return and see how much the projection changes.
How much of my final balance is my own money versus market gains?
This is the core DCA/SIP question, so the tool answers it directly. Total invested is simply your starting amount plus every monthly contribution you will make. Market gains are the rest of the balance — what compounding added on top. Over short horizons your own contributions dominate the total; over twenty, thirty or forty years the market-gains slice usually grows to become the majority of the balance. The highlighted line — market gains make up X% of your final balance — shows that split for your exact inputs, which is often more motivating than the headline number alone.
Why is the 'value in today's money' lower than the headline number?
A million in thirty years will not buy what a million buys today, because inflation erodes purchasing power. When you enter an annual inflation rate, this investment growth calculator discounts your after-tax future balance back to what it would be worth in today's money — dividing by (1 + inflation) for each year of the horizon. That real value is the more honest measure of how much your future portfolio can actually buy. Leave inflation at 0 to see the plain nominal amount, or try 2–3% to match typical long-run inflation and watch how much the real figure shrinks over long horizons.
How is capital-gains tax handled, and why might my broker's figure differ?
The tool applies your capital-gains tax rate only to the profit (market gains), not to the money you contributed, assuming a single sale at the end. The 15.4% preset reflects Korea's tax on financial income (14% income tax plus a 1.4% local surtax) as of 2025 — many countries and account types differ, and tax-advantaged accounts such as a 401(k), IRA or pension wrapper may defer or reduce tax entirely, so 0% is the default. Real brokers may tax each sale, use allowances, cost-basis rules or withholding, and rates change over time. Use this as an arithmetic estimate and confirm your own situation with a tax professional or official source.