[dustincoates]

For why the investor pays $73, it's right there in your quote:

> an Investor pays $73 for a $75 loan, discounted for risk, fees, and return expectations

The investor doesn't expect to get 100% of that $75 back on average.

The $25 is the first payment, which is made immediately.

[janosch_123]

Oh of course the investor buys $75 of debt for $73, I get it now.

I somehow had it in my head the other way around that he can borrow $75 for $73 which wouldn't make sense.

Thank you.