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How do I do a pro ration calculation in excel

Posted on 2010-11-26
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Last Modified: 2012-05-10

How do I do a proration calculation in excel?
I'd like to take inputs from the user -
Amount to prorate
Starting date - date product purchased
end date - date of failure/warranty claim
base warranty period - period where coverage is 100%
prorated warranty period - Period where warranty is prorated.  starts at day one regardless of base period.

Example:
Product is $400
Purchased 12/1/07
Warranty claim 6/1/10
Base Warranty 24months
Prorated period 6 months

$400 is prorated for 30months
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Question by:swedishmotors
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4 Comments
 
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byundt earned 500 total points
ID: 34218239
Assuming 12/1/07 is in cell A1, 6/1/10 is in cell A2, then the warranty benefit might be calculated as:
=400*MAX(0,1-DATEDIF(A1,A2,"m")*(DATE(YEAR(A1),MONTH(A1)+24,DAY(A1))<=A2)/30)

Full benefit for 24 months or less. $80 benefit pro-rated to 0 over the last 6 months. Each successive month gets $13.33 less benefit.

Brad
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LVL 1

Author Comment

by:swedishmotors
ID: 34227613
I get a number error when I try this. Prorated-Warranty-Calc.-.xls
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LVL 81

Expert Comment

by:byundt
ID: 34227699
The formula was using dates in A1 and A2. You put yours in A1 and B1. Try moving the date from B1 to A2.

Brad
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LVL 1

Author Comment

by:swedishmotors
ID: 34230507
Thank you very much for your help.
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