§ 8032 Bond Annual Repayment Requirement

• •If a city or company borrows money by selling bonds, they must pay back a little bit every year.
• •They have to pay at least 1/40th (or 2.5%) of the total money they borrowed each year.
• •This rule makes sure they don’t wait until the last minute to pay everything back.
• •It’s like if you borrow $100 from a friend, you have to pay at least $2.50 every year until it’s all paid off.

A small town borrows $40,000 to build a new park by selling bonds.

The town must pay back at least $1,000 (which is 1/40th of $40,000) every single year until the whole $40,000 is paid off. If they don’t, they’re breaking the rule.