Opportunity Cost
How to Use This Opportunity Cost Calculator
This calculator computes the future value a purchase would have reached if invested instead — turning “should I buy this $30K car or take a $20K vacation” into a concrete number showing what’s given up.
How It’s Calculated
Opportunity Cost = Purchase Price × (1 + r)^years − Purchase Price
The result is the growth you forgo by spending the money now rather than investing it.
Example
A $30,000 car purchase, if invested at 7% instead, would grow to roughly $59,000 over 10 years — meaning the real cost of the car is closer to $59,000 than $30,000 once the foregone growth is counted.
Frequently Asked Questions
Is opportunity cost the same as regret?
No — opportunity cost is a neutral financial concept (what an alternative use of the money would have returned), not a judgment on whether the original purchase was worth it.
Should every purchase be evaluated by opportunity cost?
Not necessarily — it’s most useful for large, discretionary purchases where the alternative of investing is realistic. It’s less meaningful for necessities.
What return rate is realistic to assume for the “invested instead” scenario?
A long-run diversified market average of a 6% to 7% real return is a reasonable default, though it should be adjusted down for more conservative comparisons.