Escrow Milestone Release Calculation

If a project is large and divided into milestones (say 3 milestones with 50%, 30%, 20% payment split):

• Total agreed payment = P.

• Milestone percentages: m1 = 0.5, m2 = 0.3, m3 = 0.2 (which sum to 1.0 or 100%).

• When milestone 1 is completed, the contract should release m1 * P to the seller.

For example, if P = $1000:

• After milestone 1: release 0.5 * 1000 = $500.

• After milestone 2: release 0.3 * 1000 = $300.

• After final milestone: release 0.2 * 1000 = $200.

The escrow contract would either use separate escrow accounts for each milestone or keep track of how much has been released so far. A pseudo-formula for remaining escrow balance after each release i:

$$Remaining Escrow=P×(1− j=1 ∑ i ​ m j ​ ).$$

After milestone 1 (i=1), remaining = 1000 * (1 - 0.5) = $500. After all done, remaining = 0.