Compare installments against cash considering opportunity cost.
Paying in installments often hides an interest charge inside the total price. This tool calculates the implicit monthly rate and compares it against what your money would earn if you paid cash and invested the rest.
When you enter an investment return rate, the tool computes the present value of the installments and shows which option costs less in real terms — paying now or keeping your money invested while paying monthly.
The calculation assumes the installments are equal and the investment return is steady. Fees, cashback on the credit card and the risk of default are not modelled.
Installment total = PMT × n. A cash discount d% means you pay Price × (1 − d/100). The real annual rate i solves: PMT × ((1 − (1+i)^−n) / i) = Price × (1 − d/100).
When you can invest the money you would spend upfront and earn a return higher than the interest charged on the installments. For example, if you can get 1% per month on an investment and the installment plan charges 0.5% per month, your money grows faster than the cost of financing.
Even when advertised as "interest-free", installment plans often include a hidden markup. The real cost is the difference between the cash price (with any available discount) and the total of all installments. This tool calculates that difference for you.
A cash discount (often 5–15% in Brazil) changes the math significantly. Without a discount, interest-free installments are usually better because you keep your money invested. With a cash discount, paying upfront may save more than you would earn from investments.
Use the monthly return of a low-risk investment you actually have access to. In Brazil, the Selic rate divided by 12 is a good starting point — for example, if the Selic is 13.75% per year, that is roughly 1.08% per month. CDBs and Tesouro Selic typically track this rate.
No. The comparison uses nominal values. In practice, inflation slightly favors installment payments because future installments are paid with money that has lost some purchasing power. For short-term purchases (up to 12 months), this effect is usually small.
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