Quote:
Originally Posted by Rossman
No, actually you aren't. If you paid cash for the car, you would pay no interest.
If you finance it, you pay your "only $400".
One of these results in you being $400 richer in the end, and it doesn't take a genius to figure out which it is.
|
I don't think you understand. That's alright though, like I said, different strokes.
Let's say you have 27,000 grand that you can either invest or use to purchase a car. Assuming a 7% return, in five years your lump sum is worth 37,868, which is substantially less than you are paying the bank on a loan. Does that make sense? There is always an element of risk, as 7% is not guaranteed, however.