Every purchase has a hidden price: what the money could have grown to if you had invested it. Enter what you plan to spend, any monthly cost that comes with it and its resale value, and see the future value you give up, with a comparison at other returns and time frames.
Last updated:
The purchase
$
$/ mo
Insurance, upkeep, fees or a subscription that comes with it.
$
What you could sell it for after the period.
The alternative: invest it
% / yr
years
% / yr
Shows the forgone value in today's money.
Enter your values to see the result.
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How to use the Opportunity Cost Calculator
Enter the purchase amount you are thinking of spending now.
Add any ongoing monthly cost that comes with it (insurance, upkeep, fees) and its expected resale value.
Set the investment return and time period for the alternative of investing the money.
Read the future value forgone: what the purchase really costs your future self.
Compare other returns and time frames in the tables, and download them as CSV.
How opportunity cost is calculated
The calculator compares spending with investing the same money for the same period:
Future value forgone = P × (1 + i)n + C × ((1 + r)m − 1) ÷ r − resale value
P = purchase amount now, i = yearly return, n = years
C = ongoing monthly cost, r = (1 + i)1/12 − 1 the equivalent monthly return, m = months
Resale value = what you could sell the item for at the end
Example: a $15,000 car upgrade with $80 a month of extra insurance, kept 8 years and sold for $6,000, at a 7% return: $15,000 × 1.078 = $25,773, plus $80 a month invested = $10,162, minus $6,000 resale = about $29,934 forgone, compared with $22,680 of cash spent.
What $1,000 spent today could become
Return per year
5 years
10 years
20 years
30 years
3%
$1,159
$1,344
$1,806
$2,427
5%
$1,276
$1,629
$2,653
$4,322
7%
$1,403
$1,967
$3,870
$7,612
10%
$1,611
$2,594
$6,727
$17,449
The rule of 72 gives a quick estimate: divide 72 by the return to get the years it takes money to double (about 10 years at 7%). Try the rule of 72 calculator.
Using opportunity cost in everyday decisions
Compare options, not just prices. A cheaper car with lower running costs may free up more future money than the price difference suggests.
Debt has an opportunity cost too. Paying off a 20% credit card is like earning a guaranteed 20% return.
Small recurring costs matter. Monthly costs invested over decades often outweigh the purchase price; see the latte factor calculator.
Frequently asked questions
What is opportunity cost?
Opportunity cost is the value of the best alternative you give up when you make a choice. For money, it is usually what the amount could have earned if invested instead of spent. A $5,000 purchase today has an opportunity cost of about $19,348 in 20 years if the money could have earned 7% a year.
What is the opportunity cost formula?
For a lump sum the forgone value is FV = P × (1 + i)^n, where P is the amount, i is the yearly return and n the number of years. Ongoing monthly costs add C × ((1 + r)^m − 1) ÷ r, with r the monthly rate and m the number of months. Subtract any resale value you get back at the end.
Does this mean I should never spend money?
No. Opportunity cost is a way to compare choices, not a rule against spending. Many purchases are worth far more than their opportunity cost, such as reliable transport to work, education or experiences you value. The calculator just makes the trade-off visible.
Which return should I use?
Use the return you would realistically earn on the alternative: a savings account rate if the money would sit in savings, the interest rate if you would pay off debt instead, or a long-term average for a diversified investment. The table shows the result at several rates so you can see the range.
Why add a resale value?
If you can sell the item later, you get part of the money back, which lowers the true cost. Cars, bikes, instruments and some electronics keep some value; vacations, meals and most services do not.
Is the result adjusted for inflation?
Only if you enter an inflation rate. Then the forgone value is also shown in today's money by dividing by (1 + inflation)^years. Alternatively, enter a real (after-inflation) return as the investment return.
Are all the tools on FreeToolCabin tested for quality and accuracy?
Yes! Every tool on our site undergoes automated Q/A testing in real browser environments to ensure high precision, correct output, and zero errors. If you happen to spot a bug or have a suggestion, please contact us at [email protected] and our team will review it right away.