Thursday, 30 October 2014

Answer to legal and business English quiz on Interest

Hi all, the answer to last week's quiz is c) accrue. Here is our definition taken from our new book "Drafting Commercial Contracts: Vocabulary Series" available from http://www.legalenglishbooks.co.uk/

To Accrue (verb): This means to incre...ase. It is usually used in relation to interest on debts or money in arrears. For example, BigCo Ltd borrows £40,000 from Small Bank Ltd at an interest rate of 3%. The contract states that BigCo Ltd must pay instalments of £3,000 a month. BigCo Ltd is having financial problems and cannot pay £3,000 every month and so are now in arrears. The contract states that interest will accrue on the amount of money in arrears at a rate of 5%. The amount of money that is in arrears is accruing interest at a higher rate because BigCo Ltd are late with their instalment payments to Small Bank Ltd. Associated Words: To Borrow (verb), Debt (noun), In Arrears (collocation), Interest (noun), Instalments (noun).

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