Need help quick...

**FrugalMomof3** · 08-04-2008, 10:25 PM

Ok can someone tell me what is a better offer:

1) $4200 at my existing purchase rate of 14.15%
2) $4200 with a $50 transaction fee or 3% transaction fee (whichever is less) at a percentage rate of 5.99%?

This will be paid off within 2 months but want to get a better deal so which one would be better? I need to know this ASAP before we go ahead and make a decision.

TIA!

**nodmicks** · 08-04-2008, 10:43 PM

Looks like the second option saves a few bucks.

**beks37** · 08-04-2008, 10:53 PM

I agree that the second option saves money. It doesn't look like much, but it is a better deal.

**Michelle68** · 08-04-2008, 10:55 PM

I agree with Mick. The second option looks like the better deal.

--Michelle

**Greebo** · 08-05-2008, 05:52 AM

Originally Posted by FrugalMomof3

Ok can someone tell me what is a better offer:

1) $4200 at my existing purchase rate of 14.15%
2) $4200 with a $50 transaction fee or 3% transaction fee (whichever is less) at a percentage rate of 5.99%?

This will be paid off within 2 months but want to get a better deal so which one would be better? I need to know this ASAP before we go ahead and make a decision.

TIA!

How to do the math:
1) Calculate annual interest:
a) 4200 * .1415 = $594.30
b) 4200 * .0599 = $251.58

2) Calculate the extras:
a) no extras
b) 50 or 3% - the lessor. 4200 * .03 = $126. So $50

3) Add the extras
a) 594.30 + 0 = 594.30
b) 251.58 + 50 = 301.58

So you can see, option b is nearly half the cost of option a.

**Michelle** · 08-05-2008, 06:02 AM

Originally Posted by Greebo

So you can see, option b is nearly half the cost of option a.

:yes:

Plus in the event that you can't pay it off in the 2 mos you are planning, you have a much better interest rate.

**LexTysMommy** · 08-05-2008, 07:43 AM

I love posts like this where greebo explains it. Then makes sense to me. Thanks greebo, and with that said pick B. LOL

**missyali** · 08-05-2008, 07:47 AM

I was so hoping to see a Greebo response as well. Did you ever teach? You should! I always get it after your explain it.

**FrugalMomof3** · 08-05-2008, 07:56 AM

Thank you everyone and Greebo for laying it all out there for me! I knew you would so I was hoping you would respond.

**McD** · 08-05-2008, 08:37 AM

Isnt' Greebo awesome? We need to give him a special award. Like a calculator or something.

**Greebo** · 08-05-2008, 09:01 AM

Originally Posted by missyali

I was so hoping to see a Greebo response as well. Did you ever teach? You should! I always get it after your explain it.

I've never been a "teacher" per se, but as part of my career I have given numerous seminars on technical topics, and my role as a consultant IT person benefits from my ability to translate the subject matter I'm familiar with into plain english. In my field its all too common to find people who can talk tech but can't explain a thing.

One day, once we have enough real estate income, I'd like to semi-retire, become a certified financial counselor (DR style), and help people in the neighborhood where I'm building my rental empire (step 1 to global world domination) become financially free.