Sunday, June 01, 2008

3% Financing for Lago/Jarvis Water Lines

Paperwork from the County indicates that Lake Sarasota residents have the option of choosing 3% financing to cover the "water capacity fee."

If you do the math, that 3% figure may seem misleading. Essentially, it's 240 payments of $15.09 over 20 years. If one paid 0% interest, the payments would be $11.33. Over 20 years, the total paid is $3621.60. If paid in full up front, the total is $2720. So the cost of financing the bill in actual dollars is 33% more.

Was this a misprint in the describing documents? No, it's the result as figured with the compound interest calculator used by the county utility. And according to the utility, it's accurate, the math is right.

The point? Always do the math for yourself, so you know what's what. "3%" sounds pretty low - and financing might still be the way to go. But it seems wise to know how much it's costing in actual George Washingtons.

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