To qualify as official development assistance (ODA), development loans which are concessional in nature must have...
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To qualify as official development assistance (ODA), development loans which are concessional in nature must have a grant element of at least 25 percent, calculated using a stated annual interest rate of 10 percent. Suppose Canada Infrastructure Bank has decided to consider a development loan to Argentina, Qatar World Cup Champion 2022, for its sports infrastructure development. The loan under consideration is as follows: $50,000,000 to be amortized over 8 years by 16 semi-annual payments, after a grace period of 5 years during which only interest would be paid semi-annually. This loan would charge interest at a stated annual rate of 6 percent. 1) II) Determine whether this loan would qualify as ODA. What is the maximum interest rate that could be charged for this loan to qualify as ODA? Note: Show all working steps clearly. (Important Note: Use a rate of 5% or 7% if you want to decrease or increase the subsidized rate for the calculation of maximum rate. Justify the change of your rate.) To qualify as official development assistance (ODA), development loans which are concessional in nature must have a grant element of at least 25 percent, calculated using a stated annual interest rate of 10 percent. Suppose Canada Infrastructure Bank has decided to consider a development loan to Argentina, Qatar World Cup Champion 2022, for its sports infrastructure development. The loan under consideration is as follows: $50,000,000 to be amortized over 8 years by 16 semi-annual payments, after a grace period of 5 years during which only interest would be paid semi-annually. This loan would charge interest at a stated annual rate of 6 percent. 1) II) Determine whether this loan would qualify as ODA. What is the maximum interest rate that could be charged for this loan to qualify as ODA? Note: Show all working steps clearly. (Important Note: Use a rate of 5% or 7% if you want to decrease or increase the subsidized rate for the calculation of maximum rate. Justify the change of your rate.)
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To determine whether this loan would qualify as Official Development Assistance ODA we need to calculate its grant element and check if it meets the minimum requirement of 25 percent To calculate the ... View the full answer
Related Book For
Smith and Roberson Business Law
ISBN: 978-0538473637
15th Edition
Authors: Richard A. Mann, Barry S. Roberts
Posted Date:
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