Bonnie Is Debating Whether to Take a Job as a Professional

question 44

Multiple Choice

Bonnie is debating whether to take a job as a professional therapist or a florist. She will earn $40,000 a year as a therapist or $22,000 a year as a florist. If she chooses to be a therapist, the opportunity cost is

• A) $40,000.
• B) $22,000.
• C) $18,000.
• D) unable to determine.

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Definitions:

Logarithmic Equation

An equation that involves the logarithm of an expression equal to a value or another logarithm.

Compounded Monthly

Interest is compounded monthly when it is calculated and added to the principal sum of an investment or loan each month.

Annual Interest Rate

The annual interest rate is the percentage increase in money that one earns or pays on an investment or loan over the span of one year.

Compounded Monthly

Refers to the process where interest is added to the principal balance of an investment or loan, and future interest calculations are made on the new total, on a monthly basis.