How to calculate opprtunity cost and what is the gain so earned is termed and how to calculate the gain?

In a situation if we forgo earning RM 10000.00 through investing RM 1000000.00 in Bank Fixed deposit and alternately earn RM50000.00 instead through investing the same amount in stocks, what is my opportunity cost and what would be economic or accounting term for the gain earned through forgoing the investment in Bank Fixed account? Please write me detail how we would calculate the opportunity cost and what the gain that would be earned through forgoing another option is termed in economics or accounting terminology.

Opportunity cost is the loss of potential gain from the best alternative to any choice.

Assuming that you only choices are to deposit the money in a bank or to buy stock, then

if your choice is deposit the money your oppurtunity cost is best alternative choice's gain which would come from the stock.

If your choice is to buy stock than opportunity cost is the return from the bank acount.


The consideration of opportunity costs is one of the key differences between the concepts of economic cost and accounting cost. Forgoing another option is a economic consideration than and accounting issue.

I not sure if it sufficent explanations, but you can get more information in the wikipedia pages listed below.