Paying off loans rather than making additional investments is appropriate when the expected investment return is higher than the interest rates on loans.

Question

Quizplus · Accepted Answer

Paying off loans should be prioritized if the interest rates on loans are higher than the expected investment return. This is because the borrower would end up losing money by paying more in interest on the loan than they would gain from the investment.

Paying Off Loans Rather Than Making Additional Investments Is Appropriate