What is the opportunity cost of your decision

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Reference no: EM131582294

Last month, you lent a work colleague $5000 to cover some overdue bills. He agreed to pay you in 1 month with interest at 2% for the month, thus owing you $5100. Today, when the repayment is due, he asked you to extend the loan for another month and he would pay you the $5100 next month. In the meantime, you have had the offer to invest as much as you wish in an oil-well venture that is expected to pay 38% per year and a hot new IT stock that is estimated to return 36% the first year. If you let your colleague have another month, what is the opportunity cost of your decision?

The opportunity cost is $ _____.

The opportunity cost in percentage is____________ %

Reference no: EM131582294

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