Total Interest
WAL allows one to easily compute the total interest payments, which is given by:
where r is the annual interest rate and P is the initial principal.
This can be understood intuitively as: "A dollar of principal is outstanding for on average the WAL, hence the interest on an average dollar is, and now one multiplies by the principal to get total interest payments".
Read more about this topic: Weighted-average Life
Famous quotes containing the words total and/or interest:
“If you have only one smile in you, give it to the people you love. Dont be surly at home, then go out in the street and start grinning Good morning at total strangers.”
—Maya Angelou (b. 1928)
“... there is nothing more irritating to a feminist than the average Womans Page of a newspaper, with its out-dated assumption that all women have a common trade interest in the household arts, and a common leisure interest in clothes and the doings of high society. Womens interests to-day are as wide as the world.”
—Crystal Eastman (18811928)