I'm a newbie to the forum with zero financial or statistical skills - first time post...seeking some assistance and a solution..thanks in advance!
I am trying to create a investor calculator or at least an accurate calculation of the following scenario for a financial instrument I'm aiming test as an MVP:
Say a loan is required and a funding pool of investors (N) is established to finance the loan amount (X).
Hence, the loan amount $(X) is sought by a borrower for an annual percentage yield (APY) of (Y)%.
E.g.: $2000 pooled from a number of willing investors (N) at an APY of 8.5% for a required term (T).
Risk assumptions (Outcomes) are as follows:
- 80% probability of no loss
- 10% probability of 50% loss
- 10% probability of total loss
Solution sought:
- The number of investors (N) required to reach zero (0) risk
Variables:
- The effect of an annual premium $(P) paid by a Borrower to reduce (N)
- The effect of a funded retention (FR)% to mitigate future losses
- The level of risk (R)% in the event that investor numbers (N) are altered (ideally <10).
Thanks again!!!