Dollar Cost Averaging Calculator

Calculate Dollar Cost Average



Formula

The formula to calculate the Dollar Cost Average is:

\[ \text{Average Cost} = \frac{\text{Total Investment}}{\text{Total Shares Purchased}} \]

Where:

What is Dollar Cost Averaging?

Dollar Cost Averaging (DCA) is an investment strategy where you invest a fixed amount of money at regular intervals, regardless of the asset's price. This strategy helps to mitigate the impact of volatility on the overall purchase.

Example Calculation

Consider an example where the investment amounts and shares purchased are:

Using the formula to calculate the Average Cost:

\[ \text{Average Cost} = \frac{100 + 200 + 150}{10 + 20 + 15} = \frac{450}{45} = 10 \]

This means that the average cost for this example is 10.