## Introduction

Calculating the cost basis of an investment is crucial for accurate financial record-keeping. It involves summing up the initial purchase price and any subsequent investments or expenses related to an asset. While Excel is a popular tool for financial calculations, we’ll guide you through creating a Cost Basis Calculator in HTML and JavaScript.

## Formula

The cost basis of an investment is calculated using the following formula:

Cost Basis = Purchase Price + Initial Investment

## How to Use

- Enter the purchase price of your investment in the “Purchase Price” field.
- Input any additional initial investments in the “Initial Investment” field.
- Click the “Calculate” button to compute the cost basis.

## Example

Let’s say you purchased a stock for $1,000 and later invested an additional $500. Using our Cost Basis Calculator:

- Purchase Price: $1,000
- Initial Investment: $500

Clicking “Calculate” would give you a cost basis of $1,500.

## FAQs

**What is a cost basis in investing?**- The cost basis is the total amount you’ve invested in an asset, including the purchase price and any additional investments or expenses related to it.

**Why is it important to calculate the cost basis?**- Calculating the cost basis is essential for determining capital gains or losses when you sell the asset, which affects your tax liability.

**Is the cost basis the same as the market value?**- No, the cost basis represents what you paid for the asset, while the market value is its current worth in the market.

**Can I use this calculator for stocks and real estate?**- Yes, you can use it for various types of investments, including stocks, real estate, and more.

**What if I have multiple initial investments?**- Simply add up all the initial investments in the “Initial Investment” field.

## Conclusion

A Cost Basis Calculator is a valuable tool for investors to keep track of their total investment in an asset. By creating one using HTML and JavaScript, you can easily calculate and manage your cost basis for various investments, ensuring accurate financial reporting and tax compliance.