# Contribution formula

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A **contribution formula** is a mathematical formula used to calculate the amount of money or other resources that each member of a group or organization is responsible for contributing. This can be used for a variety of purposes, such as determining funding for a project, allocating resources among members, or determining the distribution of profits or losses. The formula can be based on factors such as the number of members, the amount of resources available, or the relative contributions of each member. The specific form of the formula will depend on the context and the goals of the group or organization.

## Application

A contribution formula can be used in a variety of situations where it is important to determine the distribution of resources among members of a group or organization. Some examples include:

**Allocating funding for a project**: A contribution formula can be used to determine how much each member of a group should contribute to a project based on factors such as the number of members and the total cost of the project.**Determining the distribution of profits or losses**: A formula can be used to calculate how much each member of a company or organization should receive based on their relative contributions or investments.**Resource allocation**: A formula can be used to determine the distribution of resources such as office space, equipment, or materials among members of a group based on their needs and contributions.**Determining membership dues**: A formula can be used to calculate the amount of dues that each member of an organization should pay based on factors such as their level of involvement or the benefits they receive.

Overall, a contribution formula can be useful in any situation where it is important to fairly distribute resources among members of a group or organization based on their contributions.

## References

- Hagstroem, K. G. (1932).
*Contribution formula, integral methods, and risk theory*. Scandinavian Actuarial Journal, 1932(1-2), 1-44. - Tacchino, K. B. (2019).
*401 (k) Design: Contribution Formula, Plan Eligibility, and Vesting Choices*. Journal of Financial Service Professionals, 73(5). - Grants, E. O.
*The Family Contribution Formula*, 1984-85. INSTITUTION Office of Student Financial Assistance (ED).