How are the interest rate and monthly payments calculated?

We use the same method used by other financial institutions to calculate the fixed monthly payments. The periodic payments are determined so that, for a given interest rate, the future monthly payments are equivalent to receiving back the investment today. GoParity uses the 30/360 day-count method.

In order to determine your monthly payment, we use the following formula:

Where:

  • Value of investment: amount invested stipulated on the mutual agreement at the time of issuance.
  •  r: the project's interest rate.
  •  n : the number of payments per year.
  •  t : the project's term, in years.


Why are interest payments not calculated using this formula?


Were we to use this formula, we would be assuming that the capital invested is only repaid at the end of the project's term, and not amortized throughout the project. As all our loans are amortized, this means that the capital is repaid throughout the project, and that the value of interest payments diminishes as the capital is amortized.



Example

Imagine you are a private investor, and that you invest € 1,000 on a project with an 8 year term, 6.15% interest rate and monthly repayments. In addition to this, the project has a 12 month grace period.

According to the formula above: 

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GoParity is an impact investment platform that connects companies looking to finance their sustainable projects, with individuals and entities who want to invest sustainably. We are growing, both in terms of size and impact generated. We were born in Portugal in 2017, but have since then financed projects and grown a large community of investors all around the world.

CASA DO IMPACTO
Tv. de São Pedro 8
1200-432 Lisboa
Portugal
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© 2021 GoParity

Part or all of your original invested capital may be at risk and the return on your investment depends on the success of the project invested in. Consider all risks before investing and read the Key Investment Information Sheet (KIIS) for each investment, available at www.goparity.com. Power Parity, Lda is a crowdlending platform authorized and supervised by CMVM (Portuguese Securities Commission). All payments, transfers and funds collection are assured by MangoPay SA, an electronic payments institution authorized and supervised by CSFF (Luxembourg Financial Authority) under the nº 8711.