Weighted average is a type of an average that takes into account the relative importance of each value under consideration and is calculated by multiplying the respective weights in percentage terms with its corresponding value Weighted Average Formula W1X1 W2X2 WnXn Here w respective weight in percentage x value. Year 2 2 x 10000 20000. The basic formula for a weighted average where the weights add up to 1 is x1 w1 x2 w2 x3 w3 and so on where x is each number in your set and w is the corresponding weighting factor.
Year 3 3 x 4000 12000.
It is the average time that it takes for every dollar of principal to be repaid weighted by the size of each principal payout. Divide the weighted total by the bond face value to get the WAL. Excel SUMPRODUCT Formula what is it and how to use it. The weighted sum is 5000 1 10000 2 20000 4 105000.