Dollar-Cost Averaging (DCA) Calculator
Calculate the average price per share, total shares, and total invested when you buy a fixed dollar amount at up to four different prices.
How to use this tool
- Enter the fixed dollar amount you invest each period.
- Enter the share price at each purchase (use 0 to skip a period).
- Read your average price per share across all purchases.
- Check total shares bought and total dollars invested.
- Compare your average price with the simple average of the prices.
Dollar-cost averaging buys more shares when prices are low and fewer when high. Enter your fixed amount and up to four purchase prices to see your true average cost per share.
Formula
At each purchase you buy Amount ÷ Price shares.
Total shares = Σ (Amount ÷ Price) across every purchase. Total invested = Amount × number of purchases.
Average price per share = Total invested ÷ Total shares. Buying a fixed dollar amount means you automatically buy more shares when prices are low and fewer when high, which is why the average price is below the simple average of the prices.
How it works
Dollar-cost averaging means investing a fixed dollar amount at regular intervals regardless of price. Because a fixed amount buys more shares when the price is low and fewer when it is high, the resulting average cost per share is the harmonic-style blend of the prices — always at or below their simple arithmetic average. This is the mathematical core of the strategy's appeal.
This calculator sums the shares bought at each of up to four purchase prices (enter 0 to skip a period), totals the dollars invested, and divides to get the average price actually paid. Comparing that average with the simple average of the prices shows the small but real edge that buying fixed dollar amounts gives you in a volatile market.
The model assumes equal dollar amounts, no fractional-share limits, and no fees, dividends, or taxes. It compares average cost, not whether DCA beats investing a lump sum up front — historically lump-sum investing wins on average because markets tend to rise, while DCA mainly reduces timing risk and is well suited to investing from regular income. Reviewed by the AbraCalc Investing Desk. This tool provides general information, not investment advice; verify figures and consult a licensed professional before investing.
Worked example
$100 invested at prices of $10, $20, $25, and $50
- Shares bought: $100÷$10 = 10, $100÷$20 = 5, $100÷$25 = 4, $100÷$50 = 2.
- Total shares = 10 + 5 + 4 + 2 = 21.
- Total invested = $100 × 4 = $400.00.
- Average price = $400 ÷ 21 = $19.0476 (below the $26.25 simple average of the prices).
Average price per share: $19.0476 — 21 shares for $400.00 invested.
Shares bought with $100 at different prices
| Price | Shares ($100 ÷ price) |
|---|---|
| $10 | 10.0000 |
| $20 | 5.0000 |
| $25 | 4.0000 |
| $40 | 2.5000 |
| $50 | 2.0000 |
Key terms
- Dollar-cost averaging (DCA)
- Investing a fixed dollar amount at regular intervals regardless of the asset's price.
- Average price
- Total dollars invested divided by total shares bought; the actual cost per share under DCA.
- Lump-sum investing
- Investing all available money at once instead of spreading it over time.
- Timing risk
- The risk of investing a large amount just before a price drop; DCA spreads this out.
Frequently asked questions
- What is dollar-cost averaging?
- It is investing a fixed dollar amount at regular intervals. You buy more shares when prices are low and fewer when high, smoothing out your average purchase price.
- Why is the average price below the average of the prices?
- Because a fixed dollar amount buys more shares at low prices, low-price periods carry more weight in the share-weighted average, pulling it below the simple average of the prices.
- Is DCA better than investing a lump sum?
- On average, historically, lump-sum investing has produced higher returns because markets usually rise. DCA mainly reduces the risk of bad timing and fits investing from a regular paycheck.
- Can I use fewer than four purchases?
- Yes. Enter 0 for any price you want to skip and the calculator ignores that period.