Enter the return on the best option ($) and the return on the chosen option ($) into the Opportunity Cost calculator. The calculator will evaluate and display the Opportunity Cost.

## Opportunity Cost Formula

The following formula is used to calculate the Opportunity Cost.

OC = RB - RC

- Where OC is the Opportunity Cost ($)
- RB is the return on the best option ($)
- RC is the return on the chosen option ($)

To calculate the opportunity cost, subtract the return of the chosen option from the return of the best option.

## How to Calculate Opportunity Cost?

The following example problems outline how to calculate Opportunity Cost.

Example Problem #1:

- First, determine the return on the best option ($). The return on the best option ($) is given as 5,000.
- Next, determine the return on the chosen option ($). The return on the chosen option ($) is provided as 3,000.
- Finally, calculate the Opportunity Cost using the equation above:

OC = RB – RC

The values given above are inserted into the equation below:

OC = 5,000 – 3,000 = 2,000 ($)

Example Problem #2:** **

The variables needed for this problem are provided below:

return on the best option ($) = 2,500

return on the chosen option ($) = 500

Entering these values and solving gives:

OC = 2,500 – 500 = 2000 ($)