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Your uncle Fred just purchased a new boat. He brags to you about the low 6.9% interest rate (APR, monthly compounding) he obtained from the

Your uncle Fred just purchased a new boat. He brags to you about the low

6.9%

interest rate (APR, monthly compounding) he obtained from the dealer. The rate is even lower than the rate he could have obtained on his home equity loan

(8.1%

APR, monthly compounding). But if his tax rate is

27%

and the interest on the home equity loan is tax deductible, which loan is truly cheaper?

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