Opportunity cost of a checking account


Answer the following question:

Question 1: What is the opportunity cost of a checking account that requires a $500 minimum balance to avoid service charges? Assume an interest rate of 4%.

Question 2: If you earn a 9% return on your savings and are in the 28% tax bracket, what is your after-tax savings rate?

Please explain in detail and justify your answer.

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Finance Basics: Opportunity cost of a checking account
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