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Buy On Time or Pay Cash Cost of Borrowing . a . Amount of the loan b . Length of the loan ( in years
Buy On Time or Pay Cash
Cost of Borrowing
a Amount of the loan
b Length of the loan in years
c Monthly payment
Total loan payments made
$ per month
Less: Principal amount of the loan
Total interest paid over life of loan
Tax considerations:
Is this a home equity loan?
Do you itemize deductions on your federal tax return?
What federal tax bracket are you in
months
$
$
tableCost of Paying Cash
Net Cost of Borrowing
Annual interest earned on savings
x
j
Annual aftertax interest earnings
$
Total aftertax interest earnings over life of loan
: you
eductions
Taxes saved due to interest deductions
$
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