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how to calculate weighted average loan life. It is the average time that it takes for every dollar of principal to be repaid weighted by the size of each principal payout. Its the average time until a dollar of principal is repaid.
How To Calculate Weighted Average In Excel Sum And Sumproduct Formulas from www.ablebits.com
The result is then annualized to determine the percentage of the portfolio that closes each year. The results for the second through fourth loans are 5858 4446 and 596 respectively. 20 years x 20 4 weighted years.
It is the average time that it takes for every dollar of principal to be repaid weighted by the size of each principal payout.
The amounts of the payments are also taken into account. The results for the second through fourth loans are 5858 4446 and 596 respectively. Its the average time until a dollar of principal is repaid. The result is then annualized to determine the percentage of the portfolio that closes each year.
