Cash vs Financed Purchase Calculator — Rex's Toolbox

Rex says

Money math without the spreadsheet headache. Plug in your numbers and I'll show you exactly where the dollars land.

Try a scenario

Click to load — tweak from there.

Inputs

Purchase price($)

Loan APR(%)

Loan term (years)

Assumed investment return if cash retained(%)

Result

Better net financial outcome

Finance & Invest the Cash

Total loan interest paid

$4,702

Investment growth on retained cash

$10,064

Net advantage magnitude

$5,362

Psst — share this and help Rex grow

One click, a permanent link with your numbers baked in.

More financial

How to use this

1Enter purchase price ($).
2Enter loan apr (%).
3Enter loan term (years).
4Enter assumed investment return if cash retained (%).
5Read your better net financial outcome on the right — it updates as you type.
6Hit Share to keep the scenario or send it to someone.

About this calculator

Paying cash avoids interest entirely but ties up capital that could otherwise be invested, while financing spreads payments out and keeps your cash working elsewhere, at the cost of loan interest. This tool compares the total interest paid on a loan against the potential investment growth of keeping your cash invested instead, so you can see which path leaves you with more net worth.

FormulaFinanced Net Cost = Total Interest Paid − Investment Growth on Retained Cash. Cash Net Cost = $0 interest, $0 investment growth on that cash.

Worked example

Using the values the calculator loads with:

Inputs

Purchase price: 25000 $
Loan APR: 7 %
Loan term (years): 5
Assumed investment return if cash retained: 7 %

Results

Better net financial outcome: Finance & Invest the Cash
Total loan interest paid: $4,702
Investment growth on retained cash: $10,064
Net advantage magnitude: $5,362

What each field means

Inputs

Purchase price ($): The purchase price used in the calculation, measured in $. Starts at 25000 $ so you have a working example on load.
Loan APR (%): The loan apr used in the calculation, measured in %. Starts at 7 % so you have a working example on load. Accepted range: 0–25 %.
Loan term (years): The loan term (years) used in the calculation. Starts at 5 so you have a working example on load. Accepted range: 1–10.
Assumed investment return if cash retained (%): The assumed investment return if cash retained used in the calculation, measured in %. Starts at 7 % so you have a working example on load. Accepted range: 0–15 %.

Results

Better net financial outcome: Returned as a plain value and shown as the headline result. It recalculates instantly whenever you change an input, so you can compare scenarios without reloading.
Total loan interest paid: Returned as a money amount in US dollars. It recalculates instantly whenever you change an input, so you can compare scenarios without reloading.
Investment growth on retained cash: Returned as a money amount in US dollars. It recalculates instantly whenever you change an input, so you can compare scenarios without reloading.
Net advantage magnitude: Returned as a money amount in US dollars. It recalculates instantly whenever you change an input, so you can compare scenarios without reloading.

FAQ

Isn't paying cash always safer?

It's lower-risk since there's no debt obligation, but 'safer' isn't the same as 'better' financially if your investment return assumption comfortably exceeds your loan rate over the term.

Does this apply to mortgages too?

The same logic applies, though mortgage interest may be tax-deductible and home equity isn't as liquid as a brokerage account, both of which shift the math somewhat.

What if the market underperforms?

Financing only wins if your actual investment return beats your loan's after-tax rate; a market downturn during your loan term could flip the outcome in favor of having paid cash.

Accuracy and limitations

Results are estimates before tax, fees, and inflation unless an input explicitly covers them.
Rates are treated as fixed for the whole period — variable-rate products will drift from this projection.
This is educational maths, not financial advice. Check anything contractual with the lender or your accountant.

Related tools

New vs Used Car Total Cost Calculator

Compare depreciation, financing, and repair risk to see which car actually costs less over time.

Cite this calculator

Writing about this topic? Grab a citation — every link helps keep these tools free.

APA

RevenueLab. (2026). Cash vs Financed Purchase Cost Calculator. Retrieved from https://www.revenuelab.fyi/toolbox/cash-vs-financed-purchase-cost

HTML

<p>Source: <a href="https://www.revenuelab.fyi/toolbox/cash-vs-financed-purchase-cost" target="_blank" rel="noopener">Cash vs Financed Purchase Cost Calculator — RevenueLab</a> (2026).</p>

Markdown

Source: [Cash vs Financed Purchase Cost Calculator — RevenueLab](https://www.revenuelab.fyi/toolbox/cash-vs-financed-purchase-cost) (2026).