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Lump Sum ↔ Recurring Investment Converter
Find the monthly contribution that matches a one-time lump sum — or the lump sum equal to investing monthly — for the same future value. All figures in US dollars (USD).
The amount you could invest today, as a single deposit.
The amount you invest every month — the timing control below sets whether that is at the start or the end of the month.
Nest egg year by year
The formula
Lump sum growth: FV = P × (1 + i)N
Monthly investing (ordinary annuity): FV = M × [ (1 + i)N − 1 ] ÷ i
where i = annual return ÷ 12, and N = years × 12 months. Setting the two future values equal gives the equivalent lump sum or monthly amount.
Worked example. A $50,000 lump sum at 7% for 15 years grows to about $142,447. To reach the same amount by investing monthly instead, you would contribute roughly $449/month ($80,820 over 15 years). The lump sum wins because every dollar compounds for the full term.
Assumptions: monthly compounding, contributions at month-end, a constant return, and no taxes or fees. 7% is a common long-run planning figure for a diversified US stock portfolio; your results will vary. This tool is educational, not investment advice.
Lump sum vs. recurring: how to read the result
Investors constantly face the same question in two directions. Sometimes you have a windfall — a bonus, an inheritance, proceeds from a sale — and want to know what steady monthly habit it is worth. Other times you are already investing a fixed amount each month and want to know the single deposit that would have gotten you to the same place. This converter answers both, holding the return and time horizon constant so the comparison is apples-to-apples.
The reason a lump sum almost always looks “cheaper” than the monthly equivalent is time in the market. A one-time deposit compounds on its full balance from day one. A recurring plan drip-feeds money in, so the dollars you contribute in year 14 only compound for a year. To reach an identical future value, the monthly route therefore has to move more total cash — in the worked example, $78,480 of contributions versus a $50,000 lump sum. That gap is the cost of spreading investment out over time.
That does not make recurring investing worse. Most people do not have a large lump sum sitting idle, and investing every month — often called dollar-cost averaging — smooths out the price you pay and turns saving into a habit you barely notice. It also reduces the risk of investing a large amount at a single unlucky moment. The right question is usually not “which is mathematically cheaper” but “which matches the money I actually have and the discipline I can keep.”
Use the Lump sum → Monthly mode when you want to translate a windfall into an ongoing contribution target, and the Monthly → Lump sum mode when you want to see the deposit that equals your current savings rate. The future-value figure in the middle is the shared goal both routes reach, so you can sanity-check either path against a retirement or savings target. For a full projection of a monthly plan, pair this with our recurring investment and target-nest egg tools linked below.
Frequently asked questions
Why is the monthly total higher than the lump sum?
Because a lump sum compounds on its whole balance for the entire term, while monthly contributions are added over time and compound for shorter periods. To reach the same future value, the monthly route must contribute more dollars in total.
What return should I use?
Pick a rate that reflects your portfolio. Many US investors use about 7% per year as a long-run planning estimate for a diversified stock portfolio (before inflation adjustments). Lower it for bond-heavy or short horizons.
Does this include taxes or fees?
No. Results are pre-tax and ignore fund fees. Money in a 401(k) or IRA grows tax-deferred; a taxable brokerage account will owe tax on gains and dividends. Treat the output as a clean, before-costs comparison.
Are contributions assumed at the start or end of the month?
End of month (an ordinary annuity). Investing at the start of each month would grow slightly faster and lower the required monthly amount a little.
Is a lump sum always better?
Mathematically it usually reaches a goal with fewer total dollars, but only if you actually have the lump sum to invest and are comfortable investing it all at once. For most people, steady monthly investing is the practical and lower-stress choice.
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