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Under sections 63 and 63A of the Transfer of Property Act, 1882, what rate of interest applies to the…

For the qualifying accession or improvement cost treated as an addition to principal, sections 63 and 63A(2) use the interest rate payable on principal if one is fixed. The…

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Under sections 63 and 63A of the Transfer of Property Act, 1882, what rate of interest applies to the qualifying cost added to the mortgage principal if no rate is fixed on the principal?

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Answer and explanation

Correct answer B

For the qualifying accession or improvement cost treated as an addition to principal, sections 63 and 63A(2) use the interest rate payable on principal if one is fixed.

The fallback rate is 9% per annum.

See Transfer of Property Act, 1882, sections 63 and 63A(2).

Option feedback

Option A

The specified fallback rate is 9% per annum.

Option B

Both provisions specify 9% per annum where no rate on the principal is fixed.

Option C

The fallback rate stated in these provisions is 9% per annum.

Option D

The fallback rate stated in these provisions is 9% per annum.

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