It is better to use your savings instead of borrowing to make a purchase when:
A) you have adequate savings.
B) interest rates are rising.
C) interest rates are falling.
D) the cost of borrowing is much greater than the interest earned on savings.
E) the interest earned on savings is greater than the interest paid on the loan.

Question

Quizplus · Accepted Answer

It is better to use your savings instead of borrowing when the cost of borrowing is much greater than the interest earned on savings. This means that if you choose to borrow, you will end up paying more in interest charges compared to the interest earned on your savings. In this scenario, it is financially beneficial to use your savings instead of borrowing.

It Is Better to Use Your Savings Instead of Borrowing