Compare investing a lump sum all at once against spreading the same total over monthly installments.
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Same total and horizon, four return assumptions. Recalculated live.
| Annual return | Lump sum value | DCA value | Difference |
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Model: the same total amount P is invested in both scenarios. Lump sum invests everything at month 0; DCA invests equal monthly installments C = P / (years × 12) at the start of each month. With an annual return r, the effective monthly rate is m = (1 + r/100)1/12 − 1 and n = years × 12, giving FVlump = P × (1 + m)n and FVDCA = C × (1 + m) × ((1 + m)n − 1) / m.
Worked example: P = 10,000, 10 years, 6% per year: m = 1.061/12 − 1 ≈ 0.0048676, n = 120 and FVlump = 10,000 × 1.0610 ≈ 17,908. Each installment is C = 83.33, so FVDCA = 83.33 × (1 + m) × ((1 + m)120 − 1) / m ≈ 13,605. The lump sum ends roughly 4,303 ahead — not because the strategy is better, but because every dollar is invested for the full 10 years. With a constant positive return, money invested earlier compounds longer.
The model assumes a constant annual return with no volatility. In practice, DCA is usually chosen for risk and behavior — reducing the emotional impact of price swings, or investing as money becomes available — not to raise expected return. This is not a forecast and not financial advice.
Method reviewed August 23, 2026.
Enter the total amount you plan to invest, the time horizon in years and an expected annual return. The calculator invests the whole amount at month 0 for the lump sum scenario and spreads the same total into equal monthly installments for the DCA scenario, then projects both to the end of the horizon under the same return assumption.
The comparison isolates timing: both strategies invest exactly the same total, so any difference in final value comes from how long each dollar was invested. The model assumes a constant return and no volatility; real markets fluctuate, and the outcome says nothing about future performance.
With a constant positive return, money invested earlier compounds longer, so investing everything at month 0 ends with a higher expected value than spreading the same total over months.
When the alternative is delaying investing, when it reduces the emotional impact of price swings, or when you do not have the full amount at once. It does not raise expected return.
No. It assumes a constant annual return with no volatility; real markets fluctuate, and past performance does not predict future results.