Quantifies interest foregone while capital waits uninvested between loan commitments.
Available capital — Financial input. Directly drives affordability, yield, or cost; small changes compound over time. Example: 0.1.
Available capital is required
target rate — Rate as a percentage. Determines how quickly interest or growth accrues; even 0.5% changes matter over time. Example: 0.1.
target rate is required
idle days — Financial input. Directly drives affordability, yield, or cost; small changes compound over time. Example: 0.1.
idle days is required
Quantifies interest foregone while capital waits uninvested between loan commitments.
Formula
foregoneInterest = availableCapital × targetRate × idleDays ÷ 365