How this calculator works
Strategy A compounds all available capital from the first month. Strategy B divides it into equal month-end installments during the DCA period. Both use the same monthly-equivalent return.
Formula and methodology
DCA installment = available amount ÷ DCA months
Values are calculated with full JavaScript numeric precision and rounded only for display.
Example calculation
For $20,000 over 12 DCA months and a 10-year horizon, each DCA installment is $1,666.67 while the lump sum begins compounding immediately.
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
- Uninvested DCA cash earns no return.
- The same constant return applies each month.
- Taxes, trading costs, and volatility are excluded.
DCA vs Lump Sum Calculator FAQs
What does this strategy comparison 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.