Use the information provided to complete the following worksheet and analyze how the numbers work out most favorably for you. For simplicity compounding is ignored in calculating both the cost of interest and interest eamings. (Note: Enter your dollar answers rounded to the nearest on cents and precede numbers that are less than zero (0) with a minus sign (1. 7. Taxes saved due to interest deductions ($x 8. Total after-tax interest cost on the loan Cost of Paying Cash 9. Annual interest earned on savings (4% 10. Annual after-tax interest earnings (\$ x \%) 11. Total after-tax interest earnings over life of loan (5) years) Net Cost of Borrowing 12. Difference in cost of borrowing versus cost of paying cash Based on the numbers alone, you should because: The interest on a loan will cost you more than the interest you would earn If you invested the principal. If you invest the principal, you'll earn more interest than you'l pay on the loan