cost of money

Definition

The amount of profit that could be generated from interest payments on a given amount of money if it were invested in government bonds. The cost of money changes with variance in interest rates, and is used to gauge the opportunity costs involved in the potential investment of that money in securities or other assets.

Use cost of money in a sentence

You need to know how to best use the cost of money in your favor so that you can get even more from it.

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I wondered a lot of things in my life, but the one thing I could never figure out was the cost of money.

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The cost of money was high, as we wanted to be maximizing our ability to generate profit, so we had the financial analyst advise.

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Cost of Living Adjustment monetary policy