Kym plans to deposit $100 in an account at the end of each month for the next
Question:
Kym plans to deposit $100 in an account at the end of each month for the next five years so that she can take a trip.
(a) If Kym’s opportunity cost rate is 6 percent compounded monthly, how much will she have in the account in five years?
(b) How much will be in the account if the deposits are made at the beginning of each month?
Opportunity CostOpportunity cost is the profit lost when one alternative is selected over another. The Opportunity Cost refers to the expected returns from the second best alternative use of resources that are foregone due to the scarcity of resources such as land,...
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