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.
Equal cash does not buy equal units
The calculator assumes the price moves in equal steps from the first purchase price to the last purchase price across the chosen number of periods. The same cash amount is invested at each simulated price.
Because a fixed amount buys more shares at lower prices and fewer at higher prices, the effective average cost differs from the simple average of the price path. With one period, the first purchase price is used.
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.
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) ÷ SharesRepeated 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.
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.
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.
Educational content only. This guide is not financial advice.