Suppose you can earn 5 percent on your savings account if you deposit $500 in it. The opportunity cost of holding the $500 is
A) $25.
B) $100.
C) $495.
D) $525.
E) $125.

Name: Suppose you can earn 5 percent on your savings account if you deposit $500 in it. The opportunity cost of holding the $500 is A) $25. B) $100. C) $495. D) $525. E) $125.
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Question

Quizplus · Accepted Answer

The opportunity cost of holding the $500 is the interest you could earn, which is 5% of $500, equaling $25.

Suppose You Can Earn 5 Percent on Your Savings Account