About the Dollar Cost Average Calculator
What is the Dollar Cost Average Calculator?
Dollar-cost averaging (DCA) — called rupee cost averaging in India — means investing a fixed amount at regular intervals regardless of price. Because the same amount buys more units when prices are low and fewer when they are high, your average cost per unit ends up below the average price.
This rupee cost averaging calculator takes a monthly investment, the number of months and a starting and ending price, moves the price in a straight line between them, and shows your average cost, the units accumulated, the total invested and the final value.
How to use the Dollar Cost Average Calculator
- Monthly Investment (INR) (sample: 10,000)
- Months (sample: 24)
- Start Price (sample: 100)
- End Price (sample: 140)
- Press Analyze DCA (results also refresh as you type). The result card shows the Average Cost, along with Total Invested, Units Accumulated and Current Value.
Formula used
Average cost = Total invested ÷ Total units = n ÷ Σ (1 ÷ Priceₖ)
- Units bought in month k = Monthly investment ÷ Priceₖ
The average cost is the harmonic mean of the prices, which is always less than or equal to their simple average.
Worked example
These are the sample values already filled in the calculator above, and the result it returns for them:
| Input | Sample value |
|---|---|
| Monthly Investment (INR) | 10,000 |
| Months | 24 |
| Start Price | 100 |
| End Price | 140 |
| Result | Value |
|---|---|
| Average Cost | ₹119 |
| Total Invested | ₹2,40,000 |
| Units Accumulated | 2,020.5006 |
| Current Value | ₹2,82,870 |
Tips for using the Dollar Cost Average Calculator
- DCA reduces the regret of investing a lump sum just before a fall.
- It works best in volatile markets and over long periods.
- A SIP in a mutual fund is rupee cost averaging on autopilot.