What this calculator answers
Dollar-cost averaging means investing the same amount at regular intervals instead of buying the same number of units. When the price is low, the amount buys more units; when it is high, it buys fewer. This calculator takes the amount per purchase and the price at each of two to twelve purchases, and returns the average cost per unit, the total units bought, the total invested, the value of the position, the profit or loss with its percentage return, and the growth multiple.
How to use this calculator
The calculator shows what each unit cost you on average when you spent the same amount at every purchase, and what those units are worth.
What to enter
- Amount per purchase: the money spent at each purchase, the same every time. The default is 100, and the smallest amount is 0.01.
- Purchases: the group of purchase rows, one row per purchase, in order. It starts with four rows and holds two to twelve. Add purchase puts a new row at the end. The delete icon next to a row removes it, and the rows below it move up. The icon is not shown when only two rows are left, and at twelve rows a note takes the place of the Add purchase button.
- Price at purchase: the price of one unit at that purchase. It must be above 0. The defaults are 20, 25, 16 and 20, and a row you add starts empty, so it needs a price of its own.
- Current price: the price to value the units at. It is optional. Leave it empty or at 0, and the units are valued at the last purchase price instead.
What the results mean
- Average cost per unit: the total invested divided by the units bought. It is the price you paid for each unit, on average, across all the purchases.
- Units bought: the units from every purchase added together. Each purchase buys the amount divided by its price, so the total is often not a whole number.
- Total invested: all the money spent across the purchases.
- Current value: the units bought times the price used.
- Profit or loss: the current value minus the total invested. A negative figure is a loss.
- Return: the profit or loss as a percentage of the total invested.
- Growth multiple: the current value divided by the total invested: above 1, the units are worth more than was spent; below 1, they are worth less.
- Valued at the last purchase price: the price used to value the units when no current price is entered. The row appears only then, so you can see which price the current value rests on.
The worked example below follows three purchases from start to finish, and “How it’s calculated” on the page shows each step with the figures you entered.
The formula
Each purchase spends the amount A at a price pₖ, so it buys A / pₖ units. Over n purchases the units add up to U and the money spent is I = n × A. The average cost C is the total spent divided by the total units. Because the amount is fixed rather than the unit count, this average is the harmonic mean of the prices, which is never higher than their ordinary average and equals it only when every price is the same. The value V is the units times the price used for valuation, p, and the return r compares it with what was spent. The growth multiple m is the value divided by what was spent.
U = Σ A/pₖ, I = n·A, C = I / U, V = U·p, r = (V − I) / I, m = V / I
A worked example
Spend 100 at each of three purchases, at prices of 10, 5 and 10. The purchase at 5 buys twice as many units as each of the others, and together you hold 40 units. The total spent is three times the amount, and dividing it by the units gives an average cost of $7.50 per unit. That is below the ordinary average of the three prices, because more of the units were bought at the low price.
With no current price entered, the “Valued at the last purchase price” row shows $10.00, and the 40 units are worth $400.00. That is more than was spent: the profit comes to $100.00, and the growth multiple is 1.33×.
Which kind of DCA calculator this is
This calculator averages the prices you type. You enter the price of each purchase, and it works out the average cost, the units and their value.
It does not project future growth. A projection starts from a regular contribution and an assumed yearly return, and estimates what the balance could grow to over a number of years. The investment calculator does that, from a starting amount, a regular contribution and an annual return.
It is not a back-test either. A back-test replays a fixed amount through the real past prices of an asset, and that needs a record of those prices, which this site does not hold.
What the result does not include
The prices are whatever you enter. The result leaves out fees, commissions, spreads and taxes, all of which would change the number of units you actually received or what you keep when you sell.
FAQ
Does the calculator use historical prices?
No. It uses only the prices you type in for each purchase and an optional current price. It does not look anything up, so you can enter your own past purchases or any set of prices you want to test.
Are fees or commissions included?
No. Every purchase is treated as buying exactly the amount you enter at the price you enter. If a fee reduced the amount that actually bought units, subtract it from the amount first.
Does dollar-cost averaging guarantee a profit?
No. Buying a fixed amount at regular intervals spreads purchases over several prices, but the result depends entirely on the prices. It can end in a loss, and it does not protect against one.
Does dollar-cost averaging beat investing everything at once?
Not necessarily. FINRA states that dollar-cost averaging often produces lower returns than lump-sum investing, especially over longer periods of time, and that it sometimes results in paying a lower average price per share over time. The calculator only shows the average cost for the prices you enter; it does not compare the two approaches.