India Average Due Date

[Teat Boom]

Hello everyone, I had a few doubts with Average due date and I hope that you could help me out with it.

1. The formula for the average due date is: base date +/- Total of the Products/total of the amounts. What is the logic behind this formula and how is it derived?.

2. Can anyone explain to me the logic behind case three's steps and the formula? Sorry, If the image was badly placed

 

[kirby]

Never saw and never used such a calculation. So formula says take a date like July 30, 2020 and add a number to it??? Makes no sense to me.

 

[Teat Boom]

interesting, so you have never heard of it. It is used to calulate a day which would be used to make one single payment for all transactions.

 

[kirby]

Ok but if so then the formula lacks a key date. Most loans give a due date and a later date when a late charge would be assessed. So if the formula has data of a due date on the first and a due date on the 30th it might say you can make a single payment on the 15th. But by then the payment due on the first would be past due and assessed a late charge. I still think this is useless stuff invented by ivory tower academics.

But pragmatically, if it is gonna be on the exam then you need to learn it.