Missed the point entirely - I agree that profit on a transaction...

I read the article . It is a joke.
$4.3 is not even actual income on $100 invested which the article assumes.
The real income maybe $1 per $100 invested after accounting for employment, operating and transaction expenses.

IMHO and DYOR

Originally posted by 370830

I read the article . It is a joke.
$4.3 is not even actual income on $100 invested which the article assumes.
The real income maybe $1 per $100 invested after accounting for employment, operating and transaction expenses.

IMHO and DYOR

Missed the point entirely - I agree that profit on a transaction is not equal to income.  However, this is not what the article discusses.  The main point made is the compounding nature of the business model.

To quote

Afterpay can earn much more than 4.17%.

This is because of compounding interest. Suppose a $1,000 loan is made on January 1 at an interest rate of 4%, for two months. On March 1, $1,040 is collected – the original $1,000 plus $40 interest.

Another loan is made on March 1 – $1,040 at a 4% rate, for two months. On May 1, $1,081.60 is collected – the original $1,040 plus $41.60 interest.

This can be repeated again and again. By December 31 the initial $1,000 has grown to $1,265.32. This equates to a 26.5% annual interest rate.

Hope this helps