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by RhysU 1794 days 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.

1 comments

You 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.