Clearly it is way off. Even looking at it from a basic stand point of $95,000 invested and $9,500 gained (taking into account 121+day write offs only) you can mentally see it is not 16%. Heck round to $100K and $10K for easy math. Their gains under the performance section ONLY take into account 121+ day write offs as the bubble text over 'Principal charge-offs:' tells you. Thus I understand you using LCs % for the <30 and > 30 day notes.

If you click on the (+) it tells you about their 'convoluted' formula that is hard to verify with the numbers they give you.

How do we calculate Annualized Returns?

To calculate Annualized Returns, a total gain or loss is calculated by summing all loan payments received net of principal repayment, credit losses, and servicing costs. The gain or loss is then divided by the average daily amount of principal outstanding to get a simple rate of return. To annualize that rate, we divide it by the dollar-weighted average Note age of your portfolio (calculated in days) and then multiply it by 365. Our Annualized Return calculation includes all Notes issued and sold by Prosper Funding LLC and Prosper Marketplace, Inc. since July 15, 2009.