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annualized interest rate

By McCarthy Tétrault LLP | 7 Minutes Read May 11, 2018

Drafting interest rate calculation provisions in corporate finance transactions

If a loan document does not comply with the provision for calculating a "nominal" annual rate of interest in order to comply with section 4 of the Interest Act, then the interest rate is capped at 5% per annum. Commercial practice and appellate jurisprudence had confirmed that such provisions complied with section 4. Section 4 states:

Article by McCarthy Tétrault LLP / Business, Finance and Accounting / annualized interest rate, consumer protection, credit agreement, Interest Act, interest calculations, interest rate, interest-bearing loans, loan agreements

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