Dorothy lacks cash to pay for a $1,620 dishwasher. She could buy it from the store on credit by making 12 monthly payments of $140. The total cost would then be $1,680. Instead, Dorothy decides to deposit $135 a month in the bank until she has saved enough money to pay cash for the dishwasher. One year later, she has saved $1,733.40-$1,620 in deposits plus interest. When she goes back to the store, she finds the dishwasher now costs $1,782.00. Its price has gone up 10 percent, the current rate of inflation.
From the financial standpoint, was postponing her purchase a good trade-off for Dorothy?