Personal Finance 1st Edition by Jack R. Kapoor

Exercise 34

Using Dollar Cost Averaging. For four years, Mary Nations invested $4,000 each year in America Bank stock. The stock was selling for $34 in 2010, for $48 in 2011, $37 in 2012, and for $52 in 2013.

a. What is Mary’s total investment in America Bank?

---

b. After four years, how many shares does Mary own?

---

c. What is the average cost per share of Mary’s investment?

Step 1 of 3

a.

Calculation of Total Investment in A-Bank by M:

Total investment is obtained by multiplying the amount invested and the number of years.

Substitute $4,000 for amount invested and 4 for no. of Years

Hence, Total Investment of $16,000 is made by M in A-Bank.