Enter the total investment cost and total number of shares purchased into the calculator to determine the average purchase price per share. This calculator can also evaluate any of the variables given the others are known.

## Dollar-Cost Averaging Formula

The following formula is used to calculate the average purchase price per share using Dollar-Cost Averaging.

APP = TIC / TN

Variables:

- APP is the average purchase price per share ($) TIC is the total investment cost ($) TN is the total number of shares purchased

To calculate the average purchase price per share, divide the total investment cost by the total number of shares purchased. This will give you the average cost per share over the investment period, taking into account the varying prices at which shares were purchased due to Dollar-Cost Averaging.

## What is a Dollar-Cost Averaging?

Dollar-cost averaging (DCA) is an investment strategy in which an investor divides up the total amount to be invested across periodic purchases of a target asset in an effort to reduce the impact of volatility on the overall purchase. The purchases occur regardless of the asset’s price and at regular intervals. In effect, this strategy removes much of the detailed work of attempting to time the market in order to make purchases of equities at the best prices.

## How to Calculate Dollar-Cost Averaging?

The following steps outline how to calculate the Average Purchase Price per share using the Dollar-Cost Averaging formula.

- First, determine the total investment cost ($).
- Next, determine the total number of shares purchased.
- Next, gather the formula from above = APP = TIC / TN.
- Finally, calculate the Average Purchase Price per share.
- After inserting the variables and calculating the result, check your answer with the calculator above.

**Example Problem : **

Use the following variables as an example problem to test your knowledge.

total investment cost ($) = 500

total number of shares purchased = 25