Home        About       News       Library       Contact
1

Interest Rate

1.  The cost of borrowing money to fund repairs, renewals and maintenance of an asset.  

2. The rate at which monies are earned on the reserve balance each year through investment vehicles such as GIC or Treasury Bills (see: Interest Income

One of the financial assumptions in a reserve study. and variables / multipliers in the cash flow tables.

Changes in interest rates are one of the reasons why studies need to be updated periodically.

Cash flow table reflecting interest being earned on the reserve balance each fiscal year.
Fig. Cash flow table reflecting interest being earned on the reserve balance each fiscal year.

See also:


(c) Copyright Asset Insights, 2000-2013, All Rights Reserved. "Insight, foresight and oversight of assets".