How is my Investment Return Calculated?

Investor Return is an annualized measure of the rate of return on the principal invested over the life of an investment.  Returns are based on actual borrower loan payments (other than principal) received, net of fees and losses (including from charged-off loans.

Your Return is calculated using a formula where (A) the numerator is equal to the sum of all the interest received on active Notes, plus all late fees received on active Notes, minus all servicing fees paid, minus all collection fees paid, plus all net recoveries received on charged-off or defaulted loans, plus all net debt sale proceeds received on sold loans, plus all net sale proceeds received on Notes sold on Folio, minus gross principal losses, plus any investor promotions credited to your account; and (B) the denominator is equal to the sum of the amount of active principal balance outstanding at the end of each month since account opening. The results are then multiplied by 12 to get an annualized return. This gives us the “Return” for your Prosper Notes.

For purposes of this calculation, “active” means a Note whose corresponding borrower loan is current in payments or delinquent less than 120 days; Notes with corresponding borrower loans that have paid off, charged-off or are in default are not considered active. For Returns calculated by Prosper Rating, references to "Notes" and "loans" means Notes and loans with the specified Prosper Rating.

The Return calculation: (i) is updated monthly; (ii) only includes Notes whose corresponding borrower loan originated on or after July 1, 2009; (iii) only reflects the performance activity that occurred during the time period the Notes were held in this specific Prosper investment account; and (iv) excludes the impact of servicing related corrective non-cash adjustments that may modify the outstanding balance or status of a borrower loan.

The actual return on any individual Note depends on the prepayment and delinquency pattern of the borrower loan underlying each Note, which is highly uncertain. Historical performance is no guarantee of future results.