5.1 Opportunity Costs
Opportunity cost
FIGURE 5.2 Personal and Financial Opportunity Costs
5.1a Personal Opportunity Costs
The health of a person is another possible personal opportunity cost.
Time value of money
5.1b Financial Opportunity Costs
5.1c Interest Calculations
What would SAR 2,000 invested today at 4% for a year earn?
The increased value of money from interest earned involves two types of calculations:
Four methods are available for calculating time value of money:
Opportunity cost refers to what a person gives up when making a decision.
Which of these is not needed to calculate simple interest?
If SAR 5,000 is invested at 3% for one year, what is the amount of simple interest earned?
