estimated useful-life expectancy of a depreciable group of assets.
number of years until the date when one-half of each dollar of principal value in a security will be paid. Average life is a shorthand method of computing a bond's retirement date, which determines its yield to maturity. This calculation is only an approximation, as it depends on borrower prepayments and other factors. For example, some 30-year conventional mortgages will prepay much faster than others. Half lives of corporate and municipal bonds frequently are determined by prepayments into a sinking fund. Also called weighted average life in mortgage backed securities or average maturity in corporate and municipal bonds.
average length of time before the principal of a debt issue is scheduled to be repaid through amortization or sinking fund payments.
