Hello everyone I'm facing a cash vs debt dilema. I would like to purchase a car worth $100,000. My father is willing to give me $50,000 upfront to buy the car leaving me to take a loan for the remaining $50,000. I personally think $50,000 of my own money (or rather dad's) is too much to put out and think this doesn't make much financial sense. I'm currently weighing the option of taking a full loan for $100,000 over a 6yr term and keeping the $50,000 from my dad and investing it. Here are my 2 Options, which one is the better option:
OPTION 1: LOAN FULL AMOUNT ($100,000)
1) $100,000 Loan -12% APY Monthly Payment= $1995.02
-Total Interest over 6yrs= $40,761
- Total Repayment=$100,000 + $40, 761 Interest = $140, 761
However If I keep the $50,000 and invest it in a MMA at 5.5% (compounded monthly)I earn a total of $69,495.99 which can be used to offset the amount of the loan. Thereofre at the end of 6yrs:
My net cash outflo
2007-09-17
06:30:24
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7 answers
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asked by
amberlene202
1
in
Personal Finance