Sam prepared the following chart of calculations to review her thought process in deciding between the two options:

 

	Laundromat	Purchase New (36 months at 6%)	Purchase Used (12 months at 18% +$5 per month repair fund)
Cost per month	$20	$36	$35 + $5 = $40
Cost over 12 months	$240	$432	$420 + 60 = $480
Cost over 36 months	$720	$1,296	$420 + $180 = $600
Cost over 48 months	$960	$1,296	$420 + $240 = $660
Cost over 60 months	$1,200	$1,296	$420 + $300 - $720
Cost in hours per month	8	<2 for 36 months	<2 for 12 months

Sam’s Decision

Sam decided to buy the used washer and dryer.

The deciding factor became: was it a benefit to borrow in this case? In other words, would the cost of paying off a loan be considerably more than the $20 per month she was already spending? In this case, the extra two hours per month she would have to work for just 12 months were more than offset by the eight hours she gained by not going to the Laundromat. And, even factoring in potential repair costs, she would be saving money in less than three years.