Lump Sum vs DCA Calculator
Compare investing a lump sum today with spreading it out by dollar-cost averaging — using a steady expected return or your own price path — and see which ends ahead.
If you have a large sum to invest, you can put it all in today or feed it in over several months. Investing at once keeps more money in the market for longer; spreading it out reduces the risk of buying just before a drop. This calculator puts numbers on that trade-off, either with a steady expected return or with a month-by-month price path you type in to test a crash or a rally.
How to use this tool
- Choose a steady expected return or your own price path.
- Enter the amount and how many months you would spread the DCA over.
- Enter the interest your waiting cash earns.
- For a steady return, enter the yearly return and how many years to compare after; for a price path, type one price per month starting with today.
- Compare the two ending values and the table.
Formula
Lump sum = A × (1 + g)^N
DCA = Σ (A ÷ n) × (1 + c)^k × (1 + g)^(N − k), for k = 0 … n − 1
A is the amount, n the number of monthly installments, N the months until the comparison date, g the monthly market return and c the monthly cash rate (both converted from yearly rates). In price-path mode each installment buys shares at that month's price, and both strategies are valued at the last price.
Example
Investing $60,000 at once with a 7% expected return grows to $118,029 after 10 years. Spreading it over 12 months while waiting cash earns 4% ends at about $116,505, so the lump sum comes out about $1,525 (2.5%) ahead. With the default price path, which dips to 90 before climbing to 113, the lump sum finishes at $67,800 while DCA, buying through the dip, finishes at $69,422.
Frequently asked questions
Which usually wins, lump sum or DCA?
When markets rise more often than they fall, investing a lump sum straight away has historically come out ahead in most periods, because the money spends longer invested. DCA wins when prices fall during the spreading period.
Why use DCA at all, then?
It limits the damage of investing everything at a peak and can make it easier to stick with the plan. Many people accept a small expected cost for that peace of mind.
What does the cash rate do?
Money waiting to be invested usually sits in savings or a money market fund. The higher that rate, the smaller the expected cost of spreading your purchases out.
This tool gives an estimate for general information only. It is not financial, tax, legal or medical advice — check with a qualified professional before you rely on the result.
Last updated: 2026-10-30