Formula
Each purchase buys amount divided by that price:
Average cost = total spent / total shares
The average is not the average of the three prices. More shares are bought when the price is lower.
Assumptions
- The dollar amount is the same for all three purchases.
- Prices are the prices you actually pay.
Worked example
Three $100 purchases at $10, $20, and $5 cost $8.57 per share on average.
Input definitions
- Amount each purchase
- The dollars invested at each of the three prices.
Limitations
This is an estimate, not a loan offer, tax filing, or investment advice. The currency control changes the symbol only.
Questions
Why isn't the average $11.67?
That is the average of the prices. Dollar-cost averaging buys more shares at $5 than at $20, so the cost per share is lower.
Can I enter more than three purchases?
This page uses three. Repeat the idea by grouping purchases into three prices if you need a quick estimate.