by Anna Pfaehler
Tuesday, February 24, 2015
in Financial Planning
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In the last post, we discussed how the return on investment of a debt determines if it is a “bad” or “OK” debt.
In this post, we’ll look closer at the investment side of the equation. The cost of a debt is the interest paid. This cost changes based on the interest rate, the payment schedule and the length of the loan.
Let’s consider three types of debt at various interest rates:
Mortgage $150,000 – 30 Years, 4.0% Interest
Student Loans $33,000 – 10 years, 4.75% Interest
Credit Cards $...