9.2 New Business from Rollover

To model new business generated from rollover, the new business should be booked on the date the principal run-off occurs. A new record would be created on each date principal run-off occurs during the modeling period, as shown in the following figure:

Figure 9-1 Roll-over (150% of Principal Runoff)

Ending Balance = $57.50

Average Balance= ($50*4 days + $52.50*10 days + $57.50*17 days)/31 days

= $54.9193