It’s a good question.

Let’s say that you are looking at buying a car for $37,500. You put 20% down and finance
$30K at 8% interest for 48 months. That’s a high interest rate!

Now let’s take the $30k cash and invest it in a safe, 5-year treasury bond paying 4.7%.

The interest rate on the car is almost double the interest rate on the investments!

But let’s look at the numbers:

• The interest you will pay on the car over 48 months is $5,154.
• The interest you will earn on the bond, over those same four years, is $6,191.

You made over $1,000 by taking out the loan!

Why is that? Because the interest you are paying on the loan is decreasing every year,
and the interest you are earning on the bond goes up each year. Compounding interest is
a beautiful thing.

Are you considering a major purchase? We are happy to look at the numbers with you.

Stay the course,
Barbara

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principal. Investors should consider the investment objectives, risks, charges and expenses of the
investment company carefully before investing. The prospectus and, if available, the summary prospectus
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and summary prospectus from your financial representative. Read carefully before investing.