Question

You win $200 in a basketball pool. You have a choice between spending the money now...

You win $200 in a basketball pool. You have a choice between spending the money now or putting it away for a year in a bank account that pays 3% interest.

Which of the following is in the opportunity cost of putting the $200 in a bank account for one year?

The value you could obtain by spending the money now.

Nothing, because you won the money.

The $206 you would have a year from now.

Business   Economics   
0 0
Add a commentTranscribed image text
Next >

Homework Answers

Answer #1

0 0
Know the answer?
Your Answer:

Post as a guest

Your Name:

What's your source?

Earn Coins

Coins can be redeemed for fabulous gifts.

Log In

Sign Up

Not the answer you're looking for?
Ask your own homework help question
Similar Questions
Starting one month from​ now, you need to withdraw ​$230230 per month from your bank account...
Starting one month from​ now, you need to withdraw ​$230230 per month from your bank account to help cover the costs of your university education. You will continue the monthly withdrawals for the next four years. If the account pays 0.40.4​% interest per​ month, how much money must you have in your bank account today to support your future​ needs? How much money must you have in your bank account today to support your future​ needs? ​$nothing   ​(Round to the...
1. Suppose you win the lottery and you have the choice of a selecting the following...
1. Suppose you win the lottery and you have the choice of a selecting the following options: a/ $400 million in 10 equal payments starting today or; b/ $300 million today or; c/ $25 million per year starting at the end of year 5 forever If the interest rate is 6%, which option is the best option? (the option that will have the highest present value).
You invest $200 today, $300 next year, and $400 three years from now. How much money...
You invest $200 today, $300 next year, and $400 three years from now. How much money will you have 15 years from now if earning 10% interest? Purchasing power of money depends upon the rate of interest and time period. true or false For the purpose of analysis using PW method, we still need to renew the shorter life project. True or False
You currently have $20,000 in a bank account that pays you 5 percent interest annually. You...
You currently have $20,000 in a bank account that pays you 5 percent interest annually. You plan to deposit $800 (starting 1 year from now) every year for the next 10 years in the same account. How much are you going to have in that account at the end of 10 years? You currently have $20,000.01 in a bank account that pays you 5 percent interest annually. You plan to withdraw $800 (starting 1 year from now) every year for...
Assume that you have $3000 to invest for 5 years. You could purchase a 5-year CD...
Assume that you have $3000 to invest for 5 years. You could purchase a 5-year CD with a guaranteed interest rate of 2.52% compounded monthly. On the other hand, if you are willing to face the risk of actually losing your money, you could invest it in the stock market which has an historical return rate of about 6.5% per year. Think of this as investing your money in a non-guaranteed account that pays 6.5% APR compounded annually. With the...
We have the choice between 2 games.  Both require a $5 bet.  Make a decision as to which...
We have the choice between 2 games.  Both require a $5 bet.  Make a decision as to which game you would play based on the probability distributions below.  Let X represent amount of money won/lost.  You can either lose your $5, get your $5 back (break even), win double ($10), triple ($15) or quadruple ($20) your money. If you win $10, what is your profit? If you win $15, what is your profit? If you win $20, what is your profit? The following tables...
You have just won the Georgia Lottery with a jackpot of $26,000,000. Your winnings will be...
You have just won the Georgia Lottery with a jackpot of $26,000,000. Your winnings will be paid to you in 26 equal annual installments with the first payment made immediately. If you had the money now, you could invest it in an account with a quoted annual interest rate of 8% with monthly compounding of interest. What is the present value of the stream of payments you will receive?
What is the present value of $200 to be received two years from now, with an...
What is the present value of $200 to be received two years from now, with an interest rate of 5%? You deposit $2000 today at 6% interest. How much will you have in 5 years? You invest $5,000 today. You will earn 8% interest. How much will you have in 4 years? You have $450,000 to invest. If you think you can earn 7%, how much could you accumulate in 10 years? You deposit $300 each year for 15 years...
How much money would you have in a year if you put $1,000 in the bank...
How much money would you have in a year if you put $1,000 in the bank at an annual interest rate of 3 percent? How much would you have if you left all of that money in the bank for another year and annual interest rates increased to 4 percent in the second year? How much would you loan your brother-in-law if he said he could repay you $100 in six months, $200 in a year, and $500 in two...
The R&M Bank has offered you the choice between two investment accounts: #1 pays interest at...
The R&M Bank has offered you the choice between two investment accounts: #1 pays interest at a rate of 12% compounded semi-annually #2 pays interest at a rate of 11% compounded monthly Which investment account do you prefer and why? a) #2 highest effective rate b) #1 12% is greater than 11% c) #1 highest effective rate d) #2 greater compounding frequency
ADVERTISEMENT
Need Online Homework Help?

Get Answers For Free
Most questions answered within 1 hours.

Ask a Question
ADVERTISEMENT