How would you classify (loan or investment ???) money advanced with the understanding that it will be returned with no reduction, minimum at market interest rate until paid back (no fixed reimbursement date, more than market interest if receiver achieves a higher rate of return than interest?)
Anri Asa from USA
Anri Asa! Both given loan and investments are on the basis of some conditions. Investments' area is more wide than given loan. We can invest our money in any area with the hope of earning. Some people invest their money in old tickets with the hope that these tickets will become the part of any exhibition and they can sell it at higher price. So, from your given example, given person has just invested his money by given advance. It is not loan because whether loan is secured or unsecured, rate of interest will fix. But in given case, rate of interest is not fixed. So, it is just investment. Second condition of given loan that giver must fix the date of reimbursement but in given statement, there is no fixed reimbursement date. You have invested your $ 10,00,000 for capturing oxygen but all are getting free oxygen. So, there is no fix time of getting refund of your investment but if any disaster will happen, you can sell your oxygen calender at higher price and earn big return.