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Cost Of Investment Formula:
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The Cost Of Investment (COI) formula calculates the total cost basis for an investment by summing the purchase price, commissions, and fees. This represents the actual amount invested and is crucial for calculating capital gains and investment returns.
The calculator uses the COI formula:
Where:
Explanation: The formula provides the true cost basis of an investment, which is essential for accurate profit/loss calculations and tax reporting.
Details: Accurate COI calculation is fundamental for determining investment performance, calculating capital gains taxes, and making informed investment decisions. It ensures you know the true break-even point for your investments.
Tips: Enter the purchase price, commissions, and fees in your local currency. All values must be non-negative. The calculator will sum all components to provide the total cost of investment.
Q1: Why is COI important for investors?
A: COI determines your actual investment cost, which is essential for calculating returns, capital gains, and making informed buy/sell decisions.
Q2: What costs should be included in COI?
A: Include all direct costs: purchase price, brokerage commissions, transaction fees, and any other acquisition-related expenses.
Q3: How does COI affect capital gains calculation?
A: Capital gain = Selling price - COI. An accurate COI ensures proper tax calculation and profit/loss assessment.
Q4: Should I include ongoing fees in COI?
A: No, COI only includes one-time acquisition costs. Ongoing management or maintenance fees are operating expenses, not part of the initial cost basis.
Q5: Can COI be adjusted over time?
A: Yes, for certain investments like real estate, COI can be adjusted for improvements, but for most securities, it remains the initial acquisition cost.