FDM.3:5 - Archetypal Grounding

In the constructed loan, a lender advances 100 and the borrower owes one payment of 105 on day 30. Valid formation, currency and the fixed payment terms are supplied. The model can begin with:

The signs describe each party’s perspective. The second row is contractual; actual receipt still requires performance.

For illustration, suppose a separate performance model assumes an 80% probability of payment of 105 and a 20% probability of payment of only 60, both on day 30. Its expected receipt is 0.8 × 105 + 0.2 × 60 = 96. These probabilities are supplied assumptions, not an interpretation of an unexplained score. The expected amount is neither the contractual amount nor a discounted value.

If the actual payment is 60, retain that observation separately. Under the example’s supplied application rule and absence of additional fees or interest, FDM.4 can establish 45 remaining due. The contractual schedule does not become “60 due” merely because only 60 was paid.

Now consider a conditional support arrangement for X. The terms require a payment of 80 only after a specified failure and valid demand. Its event model must preserve those conditions and the actual payment timing rule. It cannot supply 80 of unconditional day-7 funding merely because that amount appears in the document. If the rule does not establish when funds can arrive, the timing result remains unresolved.