However, if you were willing to not touch your investment and make the payments out of your pocket there is still a problem. You have to consider the time value of money. Lets assume inflation equal to the 6% interest rate, compounded monthly. The time value of the car payments made would be $10,364.77, however the time value of your $13,488.50 after five years would only be $10,000. In other words after five years your initial investment of $10,000 has gone down in value more than the interest savings.

**Note:** The payments on a loan of $x, at intrest rate
i, over n periods is $xi/(1-v^{n}), where v=1/(1+i). In this
case x=$10,000, i=.075/12=.00625, and n=60.

Michael Shackleford, A.S.A.