hypothetical loan situation
 

Currently 20k is loaned out. 5k will be repaid in 45 days. another 5k will be paid in 90 days. After that, $500 will be paid every week until 24k total is paid off.

The borrower would like to loan another 20k with a similar sort of $500ish/week payment deal until x amount is paid. The cost for the lender to get this 20k to loan out is 1k. The lender can achieve 17% annual return through his own investments.

What amount should the loaner ask the borrower to pay for this extra 20k? I'm thinking maybe 50k or 52k total in $500/week payments after the initial 10k.

Re: hypothetical loan situation
 

Man you worded this whole thing way too confusing for me to understand.

Just one example you loan 20K in the first loan, you get 10K back then he pays 500 a week till "24K is paid off" but you never said where the other 4K came from.....

Re: hypothetical loan situation
 

I would assume the other 4k is some sort of interest for for the loan.

Re: hypothetical loan situation
 

Nice rates... Which mafia are you affiliated with?

Is leg breaking involved?

Re: hypothetical loan situation
 

that was one example, there are many more.

Re: hypothetical loan situation
 

your first loan has a present value of +$741.70 given the 17% discount rate. the second loan has a present value of +$423.39 if you go for the $52k total.

dunno which investment you'd consider riskier but obviously you'd have to consider that.

Re: hypothetical loan situation
 

The 4k is interest for the loan.

Re: hypothetical loan situation
 

pete: It's +$423.39 more than if the lender just invested the 20k at 17%? This is including the 1k in expenses?

Re: hypothetical loan situation
 

[ QUOTE ]
pete: It's +$423.39 more than if the lender just invested the 20k at 17%? This is including the 1k in expenses?

[/ QUOTE ]

yes to the first question, no to the second. i forgot the $1k and ignored it. so you'd be better of investing at 17%.