If You Are Considering a NOW Account That Requires a $500

question 42

Essay

If you are considering a NOW account that requires a $500 minimum balance and pays 2 percent interest,what would be the opportunity cost if you would need to withdraw the required minimum balance from a savings account paying 5 percent interest? Compute the opportunity cost for one year.
(a)$10
(b)$15
(c)$25
(d)$35

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Definitions:

Wine Production

The process of fermenting grapes or other fruits to produce wine, an important sector in the agricultural and food industries.

Comparative Advantage

The ability of an entity to produce goods or services at a lower opportunity cost than others, which is the basis for specialization and trade.

Netherlands

A country located in Northwestern Europe, known for its flat landscape, extensive canal systems, tulip fields, windmills, and cycling routes.

Belgium

A country located in Western Europe, known for its medieval towns, Renaissance architecture, and as headquarters of the European Union and NATO.