How this calculator works
The calculator converts the annual return assumption to an equivalent monthly rate. It compounds the existing balance, then adds each monthly contribution at the end of the month.
Formula and methodology
Balanceₙ = Balanceₙ₋₁ × (1 + monthly rate) + monthly contribution
Values are calculated with full JavaScript numeric precision and rounded only for display.
Example calculation
With $10,000 initially, $500 per month, an 8% assumed return, and 20 years, the tool compounds the balance across 240 monthly periods.
Understanding your results
Use the output to compare scenarios under consistent assumptions. It is most useful as a planning range: change the return, contribution, or duration and observe how sensitive the estimate is.
Key assumptions and limitations
- Returns remain constant for illustration.
- Contributions occur at month-end.
- Taxes, fees, and inflation are excluded.
DCA Calculator FAQs
What does this DCA calculator show?
It turns the assumptions you enter into a hypothetical estimate so you can explore long-term scenarios.
Does this calculator predict investment returns?
No. The return is a constant user-provided assumption; real returns vary and may be negative.
Are taxes and inflation included?
No. Results are nominal estimates and exclude taxes and inflation unless a calculator explicitly says otherwise.
When are contributions added?
Recurring contributions are modeled at the end of each selected contribution period.
Are fees included?
Fees are excluded except in the ETF fee calculator, which models expense ratios using a simplified net-return approach.
Can I enter a negative return?
Yes, returns greater than -100% are supported to help test downside scenarios.