Assume that your credit card balance is approximately around one of the numbers in the first column.
| Amount Borrowed |
MONTHLY PAYMENT AMOUNT NEEDED TO PAY OFF THE LOAN IN |
||||
| 1 YEAR | 2 YEARS | 3 YEARS | 4 YEARS | 5 YEARS | |
| $1,000 | $91.66 | $49.92 | $36.15 | $29.38 | $25.39 |
| $2,000 | $183.36 | $99.85 | $72.30 | $58.75 | $50.79 |
| $3,000 | $275.04 | $149.77 | $108.46 | $76.18 | $76.18 |
| $4,000 | $366.72 | $199.70 | $144.61 | $101.57 | $101.57 |
Now, look at the table below to see the total amount you will have paid to the lender. For example, if you borrow $1,000 and pay it back in 3 years, you will pay $1,301, $1,000 for principal and $ 301 in interest! The same $1,000 loan, paid back over 5 years would cost you $ 523 in interest! A $4,000 loan paid back over 5 years has total payments of $6,093, $4,000 for Principal and $ 2,093 for interest!!
|
|||||
| ORIGINAL
LOAN |
1YEAR | 2 YEARS | 3 YEARS | 4 YEARS | 5 YEARS |
| $1,000 | $1,100. | $1,198 | $1,301. | $1,409. | $1,523. |
| $2,000 | $2,200. | $2,396. | $2,602. | $2,819. | $3,046. |
| $3,000 | $3,300. | $3,594. | $3,904. | $3,1229. | $4,569. |
| $4,000 | $4,400. | $4,792. | $5,205. | $5,639. | $6,093. |
CONCLUSION
BORROWING, TO BUY "THINGS",
CAN BE 50 % MORE EXPENSIVE,
THAN BUYING FOR CASH!
IF YOU PAY 50% MORE FOR MOST OF THE "THINGS"
YOU BUY, YOU WILL ALWAYS BE IN DEBT.
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