3 ms·
No one needs to compute NPV anything. It's not that complicated. All you have to do to get backpressure is to see that spending X pesos now means that you have
by RhysU 5y ago
No one needs to compute NPV anything. It's not that complicated.
All you have to do to get backpressure is to see that spending X pesos now means that you have less than X pesos in two weeks. Because, fees and interest.
- wutbrodo 5y agoYou said that owing interest somehow implies "backpressure" in a way that zero interest loans don't. But the phenomenon you describe in this follow-up comment applies just as clearly to zero-interest loans: spending X pesos now means you forfeit X pesos later. The only difference is that, with non-zero-interest loans, you forfeit (X+I) pesos later, which requires an implicit calculation of whether time-shifting your spending is worth losing _I_ pesos.