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calculate weighted average effective interest rate
how do you calculate weighted average effective interest rate for small
businesses who have multiple number of overdrafts, overdrafts and other liabilities. 
#2




Answer: calculate weighted average effective interest rate
Calculating the weighted average effective interest rate for small businesses with multiple overdrafts, loans, and other liabilities can be a bit tricky, but it's definitely doable. Here's how you can calculate it:
For example, let's say a small business has three loans:  Loan 1: $10,000 at 5% interest  Loan 2: $5,000 at 7% interest  Loan 3: $15,000 at 4% interest To calculate the weighted average effective interest rate, you would do the following: 1. List all of the loans and their interest rates:  Loan 1: $10,000 at 5%  Loan 2: $5,000 at 7%  Loan 3: $15,000 at 4% 2. Multiply the amount of each loan by its corresponding interest rate:  Loan 1: $10,000 x 0.05 = $500  Loan 2: $5,000 x 0.07 = $350  Loan 3: $15,000 x 0.04 = $600 3. Add up all of the interest expenses:  $500 + $350 + $600 = $1,450 4. Add up all of the loan amounts:  $10,000 + $5,000 + $15,000 = $30,000 5. Divide the total interest expense by the total amount of all of the loans:  $1,450 / $30,000 = 0.0483, or 4.83% So the weighted average effective interest rate for this small business is 4.83%.
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#3
Posted to microsoft.public.excel.worksheet.functions




calculate weighted average effective interest rate
Add up the interest charge for each liability, divide this figure by the
total liabilty... So if you've got Â£100 at 5%, and Â£200 at 7% the effective rate is (5+14)/300, which is 6 and a bit. Sam "GK" wrote: how do you calculate weighted average effective interest rate for small businesses who have multiple number of overdrafts, overdrafts and other liabilities. 
#4
Posted to microsoft.public.excel.worksheet.functions




calculate weighted average effective interest rate
So, what if the 100 was last year and the 200 was today?
"Sam Wilson" wrote: Add up the interest charge for each liability, divide this figure by the total liabilty... So if you've got Â£100 at 5%, and Â£200 at 7% the effective rate is (5+14)/300, which is 6 and a bit. Sam "GK" wrote: how do you calculate weighted average effective interest rate for small businesses who have multiple number of overdrafts, overdrafts and other liabilities. 
#5
Posted to microsoft.public.excel.worksheet.functions




calculate weighted average effective interest rate
I don't quite see what you're getting at  The weighted average is always
going to be the total interest charge over the total liability. Whether it's an average over several liabilities, several years or both shouldn't matter? "Jim" wrote: So, what if the 100 was last year and the 200 was today? "Sam Wilson" wrote: Add up the interest charge for each liability, divide this figure by the total liabilty... So if you've got Â£100 at 5%, and Â£200 at 7% the effective rate is (5+14)/300, which is 6 and a bit. Sam "GK" wrote: how do you calculate weighted average effective interest rate for small businesses who have multiple number of overdrafts, overdrafts and other liabilities. 
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