Enter the following function arguments within Range Criteria and. Calculating Weighted Average Life. The following example will demonstrate how to use Excels SUMPRODUCT and SUM functions to calculate a weighted average.
It is the average time that it takes for every dollar of principal to be repaid weighted by the size of each principal payout.
Calculating the Average Life on a Bond. How to Calculate the Weighted Average Life for Bonds Bonds Repaying Principal. Step 2 Calculate the SUMPRODUCT ie multiply each value by its weight and then calculate their sum in order to get the sum-product. The weighted-average useful life of the group of assets can be calculated as 1 divided by the group depreciation rate.