Opportunity Cost Calculator

Calculate Opportunity Cost



Formula

To calculate the estimated opportunity cost:

\[ \text{Opportunity Cost} = \text{Return on Best Foregone Option} - \text{Return on Chosen Option} \]

What is Opportunity Cost?

Opportunity cost represents the potential benefits that an individual, investor, or business misses out on when choosing one alternative over another. It is important for making informed decisions.

Example Calculation 1

Let's assume the following values:

Using the formula:

\[ \text{Opportunity Cost} = 10\% - 8\% = 2\% \]

The estimated opportunity cost is 2%.

Example Calculation 2

Let's assume the following values:

Using the formula:

\[ \text{Opportunity Cost} = 15\% - 12\% = 3\% \]

The estimated opportunity cost is 3%.