Cost of delay

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
6,000.00 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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