Answer to Puzzle #1

The answer to Puzzle #1 is now visible as a comment from Ron Page under the original post.

Ron has provided the only correct answer so far (he’s missing a pair of parentheses, but it’s clear what he means). His simple calculation provides the average life of 360 principal payments. This also known as the weighted average life.

Next question: who (besides Ron) can explain why this works?

Other Posts on Puzzle #1: Puzzle #1, Clue for Puzzle #1, Puzzle #1: Epilogue

Other Puzzles: Puzzle #2, Puzzle #3, Puzzle#4

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4 Responses to Answer to Puzzle #1

  1. Win Smith says:

    Congratulations to Chun Lee NG! He answered the follow-up question correctly at a related LinkedIn discussion in the “Financial Modelling in Excel” group:

    http://www.linkedin.com/groups/Finance-math-puzzle-1724487.S.44083848?qid=51ac5743-d434-4014-b535-1ad86c29814b&goback=%2Egmp_1724487

    Like

  2. Pingback: Puzzle #1 | The Well-Tempered Spreadsheet

  3. Pingback: Clue for Puzzle #1 | The Well-Tempered Spreadsheet

  4. Pingback: Puzzle #1: Epilogue | The Well-Tempered Spreadsheet

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