Simplified example: loan repayments. Making 100 loans a month, I know that in year 1 the repayment time in months is normal(12, 1) and in year 2 it is normal(8, 1).
How do I model the estimated repayments received in each month? In excel I would have a load of manually enumerated probability tables but I wonder if there is a more elegant way in Causal?
Hi Adam, you can create a variable New Loans which has a 100 value, Year 1 Repayment and populate it with normal(12, 1) and then create a Loan Repayment variable which references Year 1 Repayment as a time modifier. See snip below for what your formula should look like:
A way to make this more powerful is to bring in the New Loans by cohort. You can do this by making a variable New Loans by cohort where the formula is if t = cohort then New Loans else 0. Then if you follow the same logic as above you can track the repayment schedule of each cohort of loans. Hope this helps!
I’ve create a cloneable model template you can use here!
Thanks so much @Sanjeev_Sandhar! I discover something more awesome about Causal every day!
Glad to help and glad to hear you’re enjoying the product!