Tag Archives: Fast Formulas

Fast Formulas #6: Finding the Time

Posted on June 30, 2015 by Win Smith

  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 →

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

Posted on August 19, 2013 by Win Smith

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 →

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

Posted on July 1, 2013 by Win Smith

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 →

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

Posted on March 1, 2013 by Win Smith

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 →

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Fast Formulas Guide

Posted on February 18, 2013 by Win Smith

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 →

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

Posted on October 18, 2012 by Win Smith

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 →

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Fast Formulas #3: The Spreadsheet

Posted on August 21, 2012 by Win Smith

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 →

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Fast Formulas #3: Pool Average Life with CPR Prepayments

Posted on July 22, 2011 by Win Smith

Fast Formulas #2: Average Life of Mortgage (Amortizing with Balloon) presented a compact formula for calculating the average life of a mortgage that pays as scheduled until it is paid off with a “balloon” payment before the scheduled end of its term.  It occurred to … Continue reading →

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Fast Formulas #2: Average Life of Mortgage (Amortizing with Balloon)

Posted on July 17, 2011 by Win Smith

Fast Formulas #1: Average Life of Mortgage (as Scheduled) showed a quick way to calculate the weighted average life (“WAL”) of a fixed-rate mortgage that pays as originally scheduled.  I found this formula (which is probably not original) by substituting the standard  level … Continue reading →

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Fast Formulas #1: Average Life of Mortgage (as Scheduled)

Posted on July 14, 2011 by Win Smith

The weighted average life (“WAL”) of a mortgage is the average time until principal is repaid.  It is also the average amount of time that the principal is outstanding.  Recall that for a standard fixed-rate mortgage with level payments, the principal … Continue reading →

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