>>11014009Interest is what balances the opportunity cost of lending money, faggot! A dollar to spend today is worth more to you than a dollar to spend next year, because you can spend today's dollar today, tomorrow, next Monday, etc! That doesn't even take into account defaults, which do occur occasionally as lending money to people is inherently risky and our society lacks debtor prisons and slavery. So, at minimum,
( 1 - default_odds )^( -1 ) - 1
must be added on to the loan, where default_odds equals the odds of default (risk) for the time length of the loan. You use the annuity equation to determine payment size, ideally with continuously compounding interest.
