The Cost of Going to an ATM Is $1 in an Economy.If

Multiple Choice

The cost of going to an ATM is $1 in an economy.If the nominal interest rate in the economy is 5 percent, what is the total cost associated with holding cash for an individual who spends $10 daily and has a 15 percent probability of having his cash lost or stolen? Assume that he visits the ATM once in every T days.

A) (182.5/T) + (0.2 × T)
B) (182.5/T) + (0.2 × T) .
C) (365/T) + (0.5 × T)
D) (365/T) + T