Weighted Average Calculation
Hi,
I'm working with a dataset and am wanting to make sure I am going to get a weighted average of our mortgage rates.
We have loans that range from 100k400k and each loan has an associated mortgage rate. As an example, we have two loans that go into the same security that are 5% and 5.5%
Loan A is worth 200k and loan B is worth 100k. I need to make sure when I am grouping them into their pools, I am not getting an average of the mortgage rate (5.25%) and am instead getting a weighted average (5.165%)
Any suggestions?
I am working with a MagicETL as well.
Loan A 200k 5% poolC
Loan B 100k 5.5% poolC
If this helps, feel free to agree, accept or awesome it!
Best Answer

For this you'll need to get the Value of the rate rather than the %, and then calculate the new percentage as the ratio between the two.
At the row level you'll need to have a value that is the Worth of the Loan times the Mortgage Rate of it. In your example for Loan A = 10K and for Loan B = 5.5K. Instead of averaging the % (which is almost never a good idea) you'll work with these values. (10 + 5.5)/(200 + 100) = 5.167% which is what you want. In a single beast mode this can be written as:
SUM(`Worth` * `Mortgage Rate`)/SUM(`Worth`)
Which will work on the aggregation level used for your data.
1
Answers

For this you'll need to get the Value of the rate rather than the %, and then calculate the new percentage as the ratio between the two.
At the row level you'll need to have a value that is the Worth of the Loan times the Mortgage Rate of it. In your example for Loan A = 10K and for Loan B = 5.5K. Instead of averaging the % (which is almost never a good idea) you'll work with these values. (10 + 5.5)/(200 + 100) = 5.167% which is what you want. In a single beast mode this can be written as:
SUM(`Worth` * `Mortgage Rate`)/SUM(`Worth`)
Which will work on the aggregation level used for your data.
1 
Categories
 All Categories
 1.1K Product Ideas
 1.1K Ideas Exchange
 1.2K Connect
 969 Connectors
 257 Workbench
 Cloud Amplifier
 1 Federated
 2.4K Transform
 76 SQL DataFlows
 501 Datasets
 1.8K Magic ETL
 2.7K Visualize
 2.2K Charting
 375 Beast Mode
 20 Variables
 485 Automate
 103 Apps
 378 APIs & Domo Developer
 6 Workflows
 22 Predict
 6 Jupyter Workspaces
 16 R & Python Tiles
 316 Distribute
 64 Domo Everywhere
 252 Scheduled Reports
 59 Manage
 59 Governance & Security
 1 Product Release Questions
 5K Community Forums
 37 Getting Started
 23 Community Member Introductions
 63 Community Announcements
 4.8K Archive