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

Add up the interest charge for each liability, divide this figure by the
total liabilty...

So if you've got £100 at 5%, and £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.

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 £100 at 5%, and £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.

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 £100 at 5%, and £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.