Enter the total number of transactions and the cost of all transactions into the calculator to determine the cost per transaction.
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Transaction Cost Formula
The following equation is used to calculate the Transaction Cost.
TC = CT / T
- Where TC is the cost per transaction ($/transaction)
- CT is the cost of all transactions
- #T is the number of transactions
To calculate the cost per transaction, divide the cost of all transactions by the number of transactions.
What is a Transaction Cost?
Definition:
A transaction cost is a measure of the average cost for every transaction that a business or person is charged.
How to Calculate Transaction Costs?
Example Problem:
The following example outlines the steps and information needed to calculate Transaction Costs.
First, determine the cost of all transactions. For this example, a business is charged $1,000.00 in transactions fees over a month period.
Next, determine the number of transactions. In this case, the number of transactions is 50 over that one month period.
Finally, calculate the cost per transaction using the formula above:
TC = CT / #T
TC = $1,000.00 / 50
TC = $20.00 / transaction
