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Weighted Average Interest Rate Update  Form

Weighted Average Interest Rate Update Form

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If you want to follow along in today's lesson you can click the link in this video description and that will take you to The Excel Cave website where you can download this workbook. Today we're going to talk about using the SUMPRODUCT Function to calculate the Weighted Average Interest Rate in Excel. So, you can see in this example here we have a pool of loans. Each of these loans has a different loan balance and therefore represents a different percentage of the pool as a whole- so that is the need for a Weighted Average. To get the Weighted Average we're going to use SUMPRODUCT Function and what the SUMPRODUCT Function does is it multiplies the values in two or more parallel arrays. So, it multiplies this balance times this rate, this balance times this rate and so on and so on. Then it adds up the sum of all those products which you then divide by your "weight" to get the Weighted Average. The "weight" being Loan Balance. So we're going to start with SUMPRODUCT, our first

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