Sometimes it may be better to use savings rather than borrowing to make a purchase.This would be recommended when:
A) the borrower has adequate savings.
B) interest rates are rising.
C) interest rates are falling.
D) the cost of borrowing is greater than the interest earned on the savings.
E) interest earned on savings is greater than the interest paid on the loan.

Question

Quizplus · Accepted Answer

If the cost of borrowing is greater than the interest earned on savings, it will be more financially beneficial to use savings instead of taking out a loan. This way, the individual can avoid paying more in interest charges than what they would earn from their savings account.

Sometimes It May Be Better to Use Savings Rather Than