P2P Lending & Crowdfunding Returns: Defaults, Diversification & Net Yield

What you'll build

What you will be able to do

Each lab ends with a concrete result that you build yourself and the checker confirms, cell by cell.

• Build a P2P platform's rate card from a base rate plus risk premiums, look up the rate of each loan you hold and calculate your amount-weighted rate.
• Calculate the monthly payment on your note with PMT, split each payment into interest and principal for the first year and total the interest you receive.
• Calculate the expected loss of each grade, turn the headline rate into a default-adjusted return, pick the best grade and find the default rate at which grade F breaks even.
• Go from gross interest to net income: servicing fee, your share of late fees, charge-offs and recoveries after collection costs, then the net yield.
• Find how many defaults each portfolio size can absorb, calculate the probability of losing money with BINOM.DIST and the return in a bad year with BINOM.INV.
• Build the net monthly cash flow of a 50-loan portfolio after defaults, recoveries and fees, then measure the return with IRR, annualise it and cross-check with XIRR.
• Compare four recovery routes for defaulted loans by net cash, present value and effective loss given default, and pick the route worth most today.
• Calculate the expected multiple of an equity crowdfunding portfolio from an outcome distribution, its expected value, how much comes from the two rare best outcomes, and chart the contributions.