#Definition of “Average Cost” on Binance:
When you buy cryptocurrency multiple times at a different price each time, the **average cost** is calculated based on the total amount you paid and the number of units you purchased.
### How to calculate the "average cost" mathematically:
If you buy cryptocurrency in multiple transactions, the average cost is calculated using the following equation:
\[
Average cost = sum (number of units) times purchase price
\]
### Practical example:
1. **First Deal:**
- I bought 10 units of VANA at $1 per unit.
- Total cost of the first deal = $10 x 1 = $10.
2. **The second deal:**
- I bought 5 more units at $1.50 each.
- Total cost of the second deal = $5 x 1.5 = $7.5.
### Average cost calculation:
Now, to calculate the average cost, we add up the total cost of all trades and divide it by the total number of units:
\[
Average cost = 10 + 7.5 = 17.5 = 15.0 = $1.17 per unit
\]
### Result:
- **Average cost** is $1.17 per VANA unit.
This means that any sale will depend on this number to reach the break-even point or profit.
