Hi John
A bit confused about subsidy loan ? and was wondering if you could help please.
I understand, there will be savings as we are getting loan at 3.1% instead of 8%.
(8m x 8%-3.1%)x annuity at 8% for 4 years = 12983)
Tax relief lost $9088.
What I don't understand is why we have not added savings but added tax relief lost??
Thank you
Ask the Tutor ACCA AFM
Amberle Co Dec18
5y ago#19088 is not the tax relief lost - it is the subsidy benefit after the tax relief lost.
70% x 12,983 = $9,088. The reason for taking 70% is that it is the benefit after tax of 30%.
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