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Description of Rate of Return

The rate of return for a loan to the co-operative starts at 5%. The rate of return for the RRSP eligible Community Bond is also 5% although the member will be responsible for the fees associated with the self-directed RRSP. On a $10,000 investment, the annual return will start at $500.

At the end of every fifth year, the rate will increase by 20%. The following chart shows the increases:

On a $10,000 loan, your return will increase from $500 in the first year, to $600 in the sixth year, $720 in the eleventh year and $864 in the 16th year. Your principle will be paid back at the end of the 20th year. The interest on a $10,000 investment over the full 20 year term is $13,420. The interest plus the principle (the gross return) would be $23,420. This works out to an average annual return of 6.71% over the 20 year term of the Feed in Tariff.