Normally, I expect to update My Prosper Internal Rate or Return twice a month: last day of the month for account value and the day I get the monthly statement. Since posting My Prosper IRR yesterday, I have gotten my monthly statement; hence, there will be 3 updates this month (yesterday, today, and the last day of the month). I received $25.40 in interest last month (note received as opposed to accrued).
That changes my December cash flow to ($274.60) — the ($300) I deposited and $25.40 in interest.
Here are teh adjusted cash flows…
| Month | Interest Earned | Monies Added | Cash flow |
|---|---|---|---|
| 7/06 | $0.00 | ($200.00) | ($200.00) |
| 8/06 | $1.92 | $0.00 | $1.92 |
| 9/06 | $2.33 | ($200.00) | ($197.67) |
| 10/06 | $2.73 | ($1,231.17) | ($1,228.44) |
| 11/06 | $13.65 | ($1,430.43) | ($1,416.78) |
| 12/06 | $25.40 | ($300.00) | ($274.60) |
| 1/07 | $3,441.44 | $0.00 | $3441.44 |
My IRR jumped from 1.11% to 1.41%. While I like to see it going up, what I am really interested in seeing is how it performs with late payments. To be clear, I am not asking for a late borrower, but I expect to have one eventually.
I welcome comments in this area, I am just starting to wrap my head around this problem.
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