Suppose you have $1,000.00 and face two alternatives: 1. Put the money in an interest-bearing account...

  

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Suppose you have $1,000.00 and face two alternatives: 1. Put the money in an interest-bearing account that pays 0.5% monthly. This account is secured against bank failure. 2. Hold the money in cash. Assume you expect to use this money for two purchases in cash during the next month. What is the minimum cost per transaction that could deter you from putting the money into the account? Suppose you have $1,000.00 and face two alternatives: 1. Put the money in an interest-bearing account that pays 0.5% monthly. This account is secured against bank failure. 2. Hold the money in cash. Assume you expect to use this money for two purchases in cash during the next month. What is the minimum cost per transaction that could deter you from putting the money into the account?

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