It is important to note that the requirements for sustainability condi-
tions vary by subsection because they are inherently different. In par-
ticular, these requirements to create sustainability may be more difficult
to achieve in practice in water and sanitation, in drainage, and in the
transportation subprojects than they are in building schools or clinics.
In this chapter, students will be able to understand: Know when to use consumer loans and be able to differentiate between the major types; identify the various sources of consumer loans; choose the best loans by comparing finance charges, maturity, collateral, and other loan terms; describe the features of, and calculate the finance charges on, single-payment loans; evaluate the benefits of an installment loan; determine the costs of installment loans and analyze whether it is better to pay cash or to take out a loan.
Interest rate swap terms typically are set so that the pres
ent value of the counterparty payments is at least equal to
the present value of the payments to be received. Present
value is a way of comparing the value of cash flows now
with the value of cash flows in the future. A dollar today is
worth more than a dollar in the future because cash flows
available today can be invested and grown.
The basic premise to an interest rate swap is that the coun
terparty choosing to pay the fixed rate and the counterpar
ty choosing to pay the floating...