# Category Archives: Fast Formulas

## Fast Formulas #6: Finding the Time

The Fast Formulas on this blog provide shortcut calculations for financial instruments such as mortgages and bonds. Most formulas involve the symbol n to represent the number of periods (e.g. years or months) until the end of the instrument. Usually … Continue reading

Posted in Bonds, Fast Formulas, Math | | 2 Comments

## Happy 0 0 1 0 0 1 0 0 0 0 1!

Most systems for representing numbers are a combination of the visible and invisible. In the familiar base-ten system, we represent numbers by linking visible digits to an invisible scaffold of powers of ten. For example, 534.08 implies the respective multiplication … Continue reading

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## Fast Formulas #1 (Follow-up): New Insight into an Old Formula

Ugarte (Peter Lorre):              You despise me, don’t you? Rick (Humphrey Bogart):     If I gave you any thought I probably would. – Casablanca If you work in finance, I bet there is something you use all the time, but … Continue reading

## Fast Formulas #3 (Follow-up): The Derivation

Fast Formulas #3: Pool Average Life with CPR Prepayments presented Formula 3.1., a compact formula for the weighted average life of a homogeneous loan pool assuming a constant prepayment rate.  I wrote that the formula took a few pages and “a couple … Continue reading

## Fast Formulas #5: Quasi-Geometric Series (The Other Trick)

In Fast Formulas #3: Pool Average Life with CPR Prepayments,  I described Formula 3.1., a compact formula for the average life of a prepaying loan pool, and  I wrote that the formula had been found by using  “a couple of … Continue reading

Posted in Fast Formulas, Math, Uncategorized | | 2 Comments

## Fast Formulas Guide

There is now a handy Fast Formulas Guide at the top of this blog.  It summarizes the key formulas and the posts that describe them.  The guide may help you see connections between the formulas. By the way, I upgraded … Continue reading

## Fast Formulas #4: Geometric Series (One of the Tricks)

In Fast Formulas #3: Pool Average Life with CPR Prepayments, I presented Formula 3.1, a shortcut calculation for the average life of a loan pool under a constant prepayment assumption.  I mentioned that Formula 3.1 was derived by using “a … Continue reading

Posted in Fast Formulas, Math | | 5 Comments

## Fast Formulas #3: The Spreadsheet

Fast Formulas #3: Pool Average Life with CPR Prepayments showed a shortcut for finding the weighted average life (“WAL”) of a homogenous pool of loans assuming a constant prepayment rate.  The shortcut, Formula 3.1, takes just a few steps to calculate … Continue reading