Pay Down Debt or Invest?
Should you pay down or invest if you have extra money?
| Alberta |
|
75,000
Taxable Income
Enter the taxable income amount from line 260 of your personal income tax return. |
Interest rate on debt (maximum value %)
|
7.99%
Input Error: Interest rate on debt
Enter a value between and %. |
| After-tax cost of debt |
7.99%
|
Rate of return (maximum value %)
|
6.00%
Input Error: Rate of return
Enter a value between and %. |
|
Rate of return breakdown:
|
Rate of return breakdown
This shows how the rate of return for the taxable investment is broken down between Interest, Eligible Dividends and Capital Gains. For example, the return on a savings account would typically be 100% interest. The return for a mutual fund with stock and bond holdings could be made up of Interest, Eligible Dividends and Capital Gains. |
Interest
|
33.33%
|
|
33.33%
|
| Capital Gains |
33.40%
Input Error: Rate of return breakdown
The percentage figures for interest, dividends and capital gains do not add up to 100%. Please correct your entries. |
| After-tax rate of return |
6.00%
|
Pay down debt
After-Tax Cost of Debt
After-Tax Rate of Return
Assumptions
Calculations use marginal tax rates as of . Rates take all federal and provincial taxes and surtaxes into account and the basic personal tax credit.
Disclaimer
Calculations use marginal tax rates as of . Rates take all federal and provincial taxes and surtaxes into account and the basic personal tax credit.
Disclaimer
