The actual annualised increase in the value of an investment after fees and defaults, 11 months after the loans were acquired by investors. This increase is expressed as a percentage of the average outstanding balance of the loans during that period.
Below shows how the return of an investment can be calculated in any given month:
The value of an investment is determined by adding two components together:
- The cash returned to investors via repayments (including recoveries from defaulted loans)
- The value of the outstanding loan balance (we calculate the value of the outstanding balance at 100% of the outstanding amount for loans that are not defaulted, and 0% for loans that are defaulted)