What average purchase price results from investing equal amounts as price changes?

Dollar-cost averaging buys more units when the price is lower and fewer when it is higher. This calculator models equal cash contributions while the purchase price moves in equal steps from the first entered price to the last.

Summing units across an equal-step price path

Priceₖ = Start price + [(End price − Start price) × k ÷ (Periods − 1)]; with one period, Priceₖ = Start priceShares = Σ(Amount per period ÷ Priceₖ); Average cost = (Amount per period × Periods) ÷ Shares

Repeated purchases from a first price to a last price

The default scenario divides total contributions across the selected number of purchases. It generates an equally spaced price path, calculates the units bought at each step and combines them into one average cost.

Illustrative inputs; currency amounts below use USD. Rates and prices are assumptions, not live quotes.

Amount per period
$250.00
Number of periods
12
Price at first buy
$10.00
Price at last buy
$14.00

Step-by-step calculation

  1. Model 12 purchases of 250 each. Prices move evenly from 10 to 14, a step of 0.363636.
  2. Buy 25 units in the first period and 17.857143 in the last; add the units from every intermediate purchase to get 252.790332.
  3. Average cost = total invested 3,000 ÷ units 252.790332 = 11.867542. Ending value = 252.790332 × 14 = 3,539.064654.

Intermediate figures are rounded for reading. Results use the full calculation precision.

Your average cost$11.87
Simple average price$12.00
Shares accumulated252.79
Total invested$3,000.00

Why the average is not the price midpoint

The average purchase price is total money invested divided by total units acquired. It is generally not the midpoint of the first and last prices because equal cash amounts buy unequal quantities.

The equal-step assumption to remember

This is not a reconstruction of real market history. If actual purchase dates or prices were irregular, enter those lots in a transaction-based calculation instead.

  • The same cash amount is invested in every purchase.
  • Prices progress from the first price to the last in equal numerical steps.
  • Fees, spreads and uninvested cash are excluded.

Calculations related to dollar cost averaging

The following tools examine neighbouring parts of the same calculation without changing the inputs or assumptions used above.

References

Sources and conventions

Quick answers

Frequently asked questions

Does this use real historical price movements?

No. It models an evenly spaced price path between the starting and ending prices you enter.

Why is average cost different from the simple average?

Equal cash purchases acquire different share quantities at different prices, creating a quantity-weighted effective cost.

What happens with one period?

The single purchase uses the starting price and the ending price is still used to value the accumulated shares.

Calculation method and limitations · Report an error

Educational content only. This guide is not financial advice.