Cost of delay
Cost of Delay is the cost to bear as a result of delay in investment. Any delay in making an investment leads to a cost/loss. The accrued interest on the investment for the duration of the delay has a significant effect on the net returns. The cost grows with the period of the investment; longer the investment more is the cost.
In simpler words, Cost of Delay is the cost as a result of delay in investment.
Real World Example
Cost of Delay Performance Chart based on Real World Example
Alberto is planning to invest 6,000.00 USD since last 8 months. He needs the money after 5 years. He is expecting an interest rate of 10.00% compounded annually.
Investment
| Amount | Period | Interest Rate | Compounding | Delay Period |
|---|---|---|---|---|
| 6000.00 USD | 5 Year | 10.00% | Annually | 8 Month |
Returns
| Interest Accrued | Maturity Amount |
|---|---|
| 3,068.17 USD | 9,068.17 USD |
See also
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