I'm developing a spreadsheet to reproduce the Net Adjusted Return calculated by LC but either i can't get the concepts right or the formula is wrong:
https://www.lendingclub.com/public/images/9f8d65e/content/aboutNAR/NAR.png" alt="" class="bbc_img" />
In the numerator they're multiplying by Principali and also dividing by Principali, ain't that redundant?
Also, what exactly is Principali? Let's say i have a zero coupon loan of $ 1000 to be paid in 10 installments, that means my Principal1 = 900, Principal2 = 800 ,..., Principal9 = 100 and Principal10 = 0?
Again, Principal10 equals to $0 and the numerator would become 0 right after the last installment is paid, does that makes any sense?)
https://www.lendingclub.com/public/images/9f8d65e/content/aboutNAR/NAR.png" alt="" class="bbc_img" />
In the numerator they're multiplying by Principali and also dividing by Principali, ain't that redundant?
Also, what exactly is Principali? Let's say i have a zero coupon loan of $ 1000 to be paid in 10 installments, that means my Principal1 = 900, Principal2 = 800 ,..., Principal9 = 100 and Principal10 = 0?
Again, Principal10 equals to $0 and the numerator would become 0 right after the last installment is paid, does that makes any sense?)