Question

Anya has decided to start her own hair-styling salon. To purchase the necessary equipment, Anya withdrew $10,000 from her savings account, which was earning 3% interest, and borrowed an additional $5,000 from the bank at an interest rate of 8%. What is Anya's annual opportunity cost of the financial capital that has been invested in the business?

Answer 1

$700

Step-by-step explanation:

The opportunity cost can be defined as the amount of money you lose by deciding to choose on project or activity over another.

Anya's opportunity cost of the financial capital invested is:

$10,000 x 3% = $300

$5,000 x 8% = $400

total = $700