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Dollar-Cost Averaging (DCA) Calculator

Model the performance of dollar-cost averaging (DCA) with recurring asset purchases.

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Calculation Parameters

Specify your inputs below.

Calculated Result

Total Invested Capital $24,000.00
Ending Portfolio Balance $34,475.29
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Expert Tip

DCA helps investors avoid trying to time the market by buying more shares when prices are low and fewer when prices are high.

How this Calculator Works

This calculator estimates investment growth using a dollar-cost averaging strategy. By investing a fixed sum at regular intervals (regardless of price), the investor buys more shares when prices are low and fewer when prices are high, lowering the average cost per share over time. Investors use it to plan savings.

Formula & Methodology

Total Invested = Recurring Deposit * Total Intervals Total Shares Accumulated = Sum (Recurring Deposit / Stock Price_i) Average Cost per Share = Total Invested / Total Shares Accumulated Portfolio Value = Total Shares Accumulated * Final Stock Price

Step-by-Step Calculation Example

Here is a step-by-step example showing how the calculations are performed:

An investor deposits $1,000 monthly for 3 months. Stock prices at intervals are $50, $40, and $60, with a final price of $60. 1. Calculate shares accumulated: - Month 1: $1,000 / $50 = 20 shares. - Month 2: $1,000 / $40 = 25 shares. - Month 3: $1,000 / $60 = 16.67 shares. - Total shares: 20 + 25 + 16.67 = 61.67 shares. 2. Calculate total invested: $3,000. 3. Calculate average cost: $3,000 / 61.67 = $48.65. 4. Calculate portfolio value: 61.67 * $60 = $3,700. Result: The DCA strategy accumulates 61.67 shares at an average cost of $48.65, worth $3,700.

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Detailed Insights & Expert Guide

ℹ️ About this Calculation

This investment analytics calculator evaluates portfolio yield, compounding growth, risk-adjusted returns, present/future asset valuations, and capital growth metrics based on CFA and modern portfolio theory (MPT) principles.

Variable Glossary

Input

Investment Parameters

Initial principal, periodic contribution, interest rate, discount factor, holding period, or asset price inputs.

Parameter

Performance Metrics

Compound Annual Growth Rate (CAGR %), Net Present Value (NPV), Internal Rate of Return (IRR), or Sharpe ratio.

How to Calculate Step-by-Step

1

Step 1

Enter your initial investment capital, asset purchase prices, or cash flow streams.

2

Step 2

Set compounding frequency, discount rate, or benchmark risk-free rate factors.

3

Step 3

Review calculated total return value, annualized growth %, or risk-adjusted alpha/beta statistics.

FAQ

How does compounding frequency impact investment returns?
More frequent compounding (e.g. monthly or daily vs. annually) generates higher effective annual yields (APY) because interest is calculated on accumulated interest earlier in the period.
What is the difference between Sharpe Ratio and Sortino Ratio?
The Sharpe ratio divides excess return by total standard deviation (both upside and downside volatility), whereas the Sortino ratio divides excess return by downside deviation only.
Should investment calculators replace professional wealth management?
No. Investment calculators model financial mathematics under assumed growth rates. Actual market performance fluctuates, so consult a licensed financial planner (CFP) or RIA for personalized advice.