Borrow vs invest

The actual decision: borrow at R% and keep your cash invested, or pay cash and miss the returns?

Amount needed

Loan APR

Loan term

Expected return

Verdict

Borrow and invest

Your expected return (7.00%) exceeds the loan APR (5.00%). Borrowing and keeping your cash invested puts you $1,643.12 ahead after the loan is paid off.

Borrow scenario

$1,643.12

Net after paying off loan, with cash grown at 7.00% over 4 years

Break-even return

5.00%

The expected return at which borrow and pay-cash are exactly equal — it's the loan rate.