§ 131112 Bond Interest Rate Limit

• •Bonds (like loans for big projects) can have interest rates, but they can't be too high.
• •Interest is paid twice a year, except the first payment can cover up to a year.
• •The group that sets up the tax decides how long the first interest period is.

A city wants to build a new park and borrows money by selling bonds.

The city has to pay interest on the money it borrowed. It pays interest every 6 months, but the first payment might cover a whole year if the city decides that.