Investment vs. purchase
You can use the 6900 to make an investment. Or to buy something. That's why people keep reminding you that you could make interest. Because most people think of either 7200 now or paying the same 7200 over time. So you could just be storing the 7200 under the mattress until you pay it out. Obviously in that case, inflation doesn't matter ("is not applicable"). You've given up the use of the 7200 from the beginning.
Think of it instead as 7200 now and twenty-three payments of 300 each. So 14,100 total. Then you can spend 6900 on something else at the beginning or spend 300 a month on other things. The difference between spending 6900 now and 300 in each of twenty-three months would be measured in inflation. Of course, this requires you to have both 7200 now and an income stream producing at least 300 a month.
Another way of doing things is to take 6900 and invest it. Each month you remove 300 and use it to make a payment. We're now back to just one 7200, plus the interest over time. I would argue that this is still an inflation advantage. It's just that instead of spending the money, you invested it. And that of course is your prerogative. The point being that you would not have that opportunity if you paid up front.
Now to calculate the difference in monthly payments of 300 euro using the above webpage what should I do?
As already said, you would have to calculate twenty-three values and then sum them with the 300 you pay up front in the monthly.
There are other ways to calculate it, if you are not using that particular tool. For example, there are formulas to calculate the net present value of an annuity. E.g. see Investopedia.
P = PMT x ((1 - (1 / (1 + r) ^ n)) / r)
P = the present value of an annuity stream
PMT = the dollar amount of each annuity payment
r = the inflation rate
n = the number of periods in which payments will be made
Investopedia talks about interest rates, but you can put inflation there for this purpose. In that case,
r might better be called the "discount rate".
PMT is 300.
r is whatever estimate you are using for inflation. E.g. .003 per period.
n is 23.
Note that the monthly inflation rate is smaller than the annual rate. So .003 is about 3.66% annually. 3.04% annually is more like .0025 a month.
I found calculators for this with search terms "present value of annuity calculator". Some of the calculators will take the annual rate (3.66%) and number of periods per year as input. Or the calculator may take a monthly rate as a percentage (.3%) rather than as a decimal (.003). So be careful of the inputs.
This gives me a net present value (NPV) of 6,657.69 for the 23 payments of 300, assuming .3%. Or 6957.69 is the NPV of the monthly payments and 7200 is the NPV of the 7200 up front.
Obviously if you can pay less than 6957.69 up front rather than 7200, then it makes more sense to pay up front.
Even without a discount though, it still may make more sense to pay up front.
- You can't spend the money in the meantime, so you manage yourself better.
- Real (inflation-adjusted) interest rates are often negative for small amounts.
- You may not have the 300 per month surplus income to keep up with the payments.
- Avoid fees if you miss a payment.
How much those intangibles are worth is up to you.