Dollar Cost Averaging Calculator

Dollar Cost Averaging (DCA) means investing a fixed amount of money at regular intervals, regardless of the share price.

How it works:

• You invest the same dollar amount each period
• When prices are low, you buy more shares
• When prices are high, you buy fewer shares
• Over time, your average cost per share tends to be lower than the average price

Formula:

Average Cost = Total Invested / Total Shares Purchased

Example: Investing $500/month for 4 months at prices $50, $40, $60, $50:

• Month 1: $500 / $50 = 10 shares
• Month 2: $500 / $40 = 12.5 shares
• Month 3: $500 / $60 = 8.33 shares
• Month 4: $500 / $50 = 10 shares
• Total: 40.83 shares for $2,000
• Average cost: $2,000 / 40.83 = $48.98/share
• Average price was $50, but you paid less because you bought more shares when cheap