interest reserve account


Type of savings account created to pay off interest costs accrued from a long-term debt obligation. These accounts are more commonly used for large construction projects. The amount stored in an interest reserve account can be calculated through various formulas depending on the size and scope of the underlying debt. For example, one method is to take the total loan value multiplied by the interest percentage multiplied by the estimated length of time it will take to complete the project multiplied by the percentage of time for which the loan will be outstanding.

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You should make sure that you have enough in your interest reserve account to cover what you may need to spend.

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He opened an interest reserve account and that was a really good thing for us to do and I really liked the account.

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My brother is a financier who works with construction companies and will frequently put together an interest reserve account to pay off the company interest costs.

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