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How is interest handled on loans in EVE?
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Kip Malice
The Scope
Gallente Federation
#1 - 2016-06-09 16:00:17 UTC  |  Edited by: Kip Malice
I just came back to EVE (very casual 2-3 year player back in 2006), and one thing I do like about it is the market part. Anyway to my question.

Just scanning through the Forums here I have noticed that the interest just seems to be a flat % of principle rather than an interest rate. I'm the project manager for a software company that develops banking software. I have been starting to focus on programming myself, I was curious on what the interest might be for an application that could be used in EVE that could track loans, interest, and payments.


Edit-This autocorrect crap is going to kill me.
Grendell
Technologies Unlimited
#2 - 2016-06-09 16:49:51 UTC
Kip Malice wrote:
I just came back to EVE (very casual 2-3 year player back in 2006), and one thing I do like about it is the market part. Anyway to my question.

Just scanning through the Forums here I have noticed that the interest just seems to be a flat % of principle rather than an interest rate. I'm the project manager for a software company that develops banking software. I have been starting to focus on programming myself, I was curious on what the interest might be for an application that could be used in EVE that could track loans, interest, and payments.


Edit-This autocorrect crap is going to kill me.



I'd suspect the interest would be fairly small as the way it's been done here for a long time is very simple.

Example: 10b loan @ 2% interest (borrower pays 200m to the investors once a month)


Maybe I'm wrong, maybe I'm old, maybe others here would like to see something better.Lol

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Cista2
EVE Museum
#3 - 2016-06-09 16:55:46 UTC

Don't understand the question.
"track loans, interest, and payments" - for which party?

My channel: "Signatures" -
Kip Malice
The Scope
Gallente Federation
#4 - 2016-06-09 17:25:50 UTC  |  Edited by: Kip Malice
Cista2 wrote:

Don't understand the question.
"track loans, interest, and payments" - for which party?


Anyone, basically username/pw to connect to that specific database with different access levels. Each party will have a verification process that shows payment made/received. Lenders can have multiple loans etc.

Yeah I know that's kind of why I am asking. I think it would be pretty hard to get the entire idea of using an APR instead of the flat% off of principle. I mean you can change the % to an APR, but to get those payback numbers you would just raise the %.
Kip Malice
The Scope
Gallente Federation
#5 - 2016-06-09 17:38:58 UTC  |  Edited by: Kip Malice
Grendell wrote:
Kip Malice wrote:
I just came back to EVE (very casual 2-3 year player back in 2006), and one thing I do like about it is the market part. Anyway to my question.

Just scanning through the Forums here I have noticed that the interest just seems to be a flat % of principle rather than an interest rate. I'm the project manager for a software company that develops banking software. I have been starting to focus on programming myself, I was curious on what the interest might be for an application that could be used in EVE that could track loans, interest, and payments.


Edit-This autocorrect crap is going to kill me.



I'd suspect the interest would be fairly small as the way it's been done here for a long time is very simple.

Example: 10b loan @ 2% interest (borrower pays 200m to the investors once a month)


Maybe I'm wrong, maybe I'm old, maybe others here would like to see something better.Lol



So, like 10 bill loan at 25% APR would earn $ 6,849,315 daily, so in a 31 day month it would earn $212,232,767. So basically an interest only payment would be that number.

I just think the EVE universe is really pretty cool in the market area. I am just mostly curious what the EVE banking community thinks of using some "semi-real world standards".
Scarlett LaBlanc
University of Caille
Gallente Federation
#6 - 2016-06-09 18:54:33 UTC
I think that since there is no in game mechanic, and most loans are based on trust to a large degree that few people would want a system that is more complex mostly for the benifit of being more complex.

I also think that few people have a solid grasp on what an APR is and how it functions. Though I imagine this sub-forum would represent better than the eve community at large.

I personally don't see a use case for it, but I have neither been a barrower nor a lender. As such I don't value my own opinion too highly on this.
Cista2
EVE Museum
#7 - 2016-06-09 19:44:38 UTC
Thing is, flat rate has worked for the EVE secondary market for 10 years now. As the other poster said, although there are people here that are well versed in more advanced business models and accounting, we are after all in a game. This is the level of complexity that the community is comfortable with.

My channel: "Signatures" -
Sabriz Adoudel
Move along there is nothing here
#8 - 2016-06-10 15:23:03 UTC
Transactions are not large enough for players to want to carry out serious dilligence into interest rate tracking.

'X% per calendar month or part thereof' or 'X% every Sunday before downtime' work fine when the amounts are (at the absolute most) similar in size to IRL used car loans.

If a bond for 75 trillion ISK is ever posted this degree of dilligence might be worthwhile. I think other forms of diligence might be more appropriate, however.

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Areen Sassel
Dirac Angestun Gesept
#9 - 2016-06-11 01:48:13 UTC
Kip Malice wrote:
Just scanning through the Forums here I have noticed that the interest just seems to be a flat % of principle rather than an interest rate. I'm the project manager for a software company that develops banking software.


I daresay project managers for software companies that develop banking software often can't spell "principal". Sadly, I'm not even joking, having known a few project managers in my time.

In the case where the interest is paid in full sufficiently regularly, it makes no difference; there's no compounding because there's no unpaid interest and the principal is unchanged.