Rather Than Go Out to Eat by Yourself, You Decide

question 220

Essay

Rather than go out to eat by yourself, you decide to stay at home and fix dinner for yourself and your two roommates. Your roommates applaud your decision. Your first roommate tells you that your decision to eat at home has no opportunity cost because you already have all the dinner ingredients in your pantry. Is this roommate's comment correct?

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Definitions:

Compound Interest Tables

Charts that indicate the amount of interest an investment will earn over time, factoring in the effect of compounding.

Equal Withdrawals

A term typically used in finance to describe a method of distributing assets or funds evenly over a set period of time.

Investment Plan

A financial strategy plotted for making investments in various assets with the goal of achieving specific financial objectives.

Inherited Annuity

A financial product received as part of an inheritance, providing periodic payments that were initially purchased by a deceased individual.