Pls tell the formula of average if drawings are made on beginning/middle/end of each half year ??
Hi Rahul,
Let me explain you the calculation of average period when fixed amount is withdrawn for a period of six months (or what we call is half year). For this, consider any half year (can be the first half year i.e. Jan 01 to June 30 or the second half year i.e. July 01 to Dec. 31).
The average period is calculated as;
If fixed amount is withdrawn at the beginning of every month for six months (Jan 01, Feb. 01......June 01)
Explanation: In this case, the amount is withdrawn in the beginning of six months, then time left after first drawings (made on Jan 01) will be 6 months and time left after last drawings (made on June 01) will be 1 month. Now, if you calculate the average period using the above formula, the result is 3.5 months, as shown below.
If fixed amount is withdrawn in the middle of every month for six months (Jan 15, Feb. 15.....June 15)
If fixed amount is withdrawn at the end of every month for six months (Jan 31, Feb. 28...June 30)
I hope this clears your query.
Let me explain you the calculation of average period when fixed amount is withdrawn for a period of six months (or what we call is half year). For this, consider any half year (can be the first half year i.e. Jan 01 to June 30 or the second half year i.e. July 01 to Dec. 31).
The average period is calculated as;
If fixed amount is withdrawn at the beginning of every month for six months (Jan 01, Feb. 01......June 01)
Explanation: In this case, the amount is withdrawn in the beginning of six months, then time left after first drawings (made on Jan 01) will be 6 months and time left after last drawings (made on June 01) will be 1 month. Now, if you calculate the average period using the above formula, the result is 3.5 months, as shown below.
If fixed amount is withdrawn in the middle of every month for six months (Jan 15, Feb. 15.....June 15)
If fixed amount is withdrawn at the end of every month for six months (Jan 31, Feb. 28...June 30)
I hope this clears your query.