Dollar-cost averaging
Dollar-cost averaging (DCA) calculator
See how investing a fixed amount on a regular schedule compounds over time. Compoundly splits your total invested from the growth it generates and charts the whole journey.
Model your DCA plan
A fixed contribution is invested each period at the end of the period.
Future value
£173,019
Total contributions
£90,000
Investment growth
£83,019
Balance over time
Stacked: your contributions vs. compounded growth.
Year-by-year breakdown
| Year | Balance | Contributions | Growth |
|---|---|---|---|
| 1 | £6,225 | £6,000 | £224.96 |
| 2 | £12,967 | £12,000 | £966.59 |
| 3 | £20,268 | £18,000 | £2,268 |
| 4 | £28,175 | £24,000 | £4,175 |
| 5 | £36,738 | £30,000 | £6,738 |
| 6 | £46,013 | £36,000 | £10,013 |
| 7 | £56,057 | £42,000 | £14,057 |
| 8 | £66,934 | £48,000 | £18,934 |
| 9 | £78,715 | £54,000 | £24,715 |
| 10 | £91,473 | £60,000 | £31,473 |
| 11 | £105,290 | £66,000 | £39,290 |
| 12 | £120,254 | £72,000 | £48,254 |
| 13 | £136,460 | £78,000 | £58,460 |
| 14 | £154,011 | £84,000 | £70,011 |
| 15 | £173,019 | £90,000 | £83,019 |
Consistency beats timing
Dollar-cost averaging takes the guesswork out of when to invest. By committing to a fixed amount on a schedule, you stay invested through ups and downs and let compounding do the heavy lifting over years and decades.
Add an annual contribution increase in the advanced options to model stepping up your investing as your income grows — a small bump each year can dramatically lift the final balance.
How compounding works
Compounding is growth on growth. Each period, your returns are added to your balance — and the next period earns returns on that larger balance too. Over long horizons this snowball effect dwarfs your original contributions.
A lump sum grows by FV = PV × (1 + r)ⁿ, where r is the periodic rate and n the number of periods. Monthly compounding splits the annual rate into twelve.
Regular deposits form an annuity:FV = PMT × [(1 + r)ⁿ − 1] / r. We add contributions at the end of each period (ordinary annuity).
With DRIP, dividends buy more shares, which pay more dividends. Add dividend growth and your yield on cost rises year after year — the engine behind real passive income.
Why time matters more than rate
Invest £10,000 at 7% with no further deposits and you have roughly £19,672 after 10 years, but about £76,123 after 30 years. The extra two decades did far more than the first one — because each year compounds on an ever-larger base. Starting earlier usually beats trying to earn a higher return.
Pick the right calculator
One engine, four lenses. Each mode tailors the inputs and outputs for a specific question — all using the same correct compounding math.
Ready to put compounding to work?
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Frequently asked questions
What is dollar-cost averaging?
Dollar-cost averaging (DCA) means investing a fixed amount of money at regular intervals — for example £500 every month — regardless of price. You automatically buy more units when prices are low and fewer when they are high, which smooths your average entry price and removes the temptation to time the market.
How does this DCA calculator work?
Enter your regular contribution, expected annual return, compounding frequency and timeframe. Compoundly applies returns each period and adds your fixed contribution at the end of each period, then shows the future value, total invested, growth, and a year-by-year chart and table.
Is dollar-cost averaging better than investing a lump sum?
Historically, investing a lump sum immediately has often beaten DCA because markets tend to rise over time. But DCA reduces the risk of investing everything just before a downturn and is the natural approach when you are investing from regular income rather than a windfall.
Does the result include fees and taxes?
No. To approximate platform fees, lower your expected return by the fee percentage. Taxes depend on your account type and jurisdiction. Results are estimates for education, not financial advice.