Lucky Louie is considering a NOW account that requires a $1500 minimum balance and pays .5% interest
What would be the opportunity cost if Louie needs to withdraw the required minimum balance from a savings account paying 2% interest? Compute the opportunity cost for one year.
A) $10
B) $22.50
C) $25
D) $35
Answer: B
Explanation: B) 5% (savings account rate) - 2% (NOW account rate) = 3% × $500 (NOW account minimum) = $15
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