Cost of Finance ( Building Works )

• Payment to building contractor are usually make at interval during progress of work ( Progress payment ) .
• So the full cost the financing this part of work will not incurred at the beginning of the period of construction work .
• The finance should be calculated on compound interest but as the period of development is generally fairly short . simple interest is sometimes used .
• The longer the period between the borrowing and receiving the rent , the greater will be financial cost .
• The building cost finance may be calculated as half of the building cost at the rate of interest for full term ( using compound interest where the period are long one )
• Or full building cost for half the term ( also use compound interest for along building period ) . 0