(a) Monthly fee, $2.80; processing fee, $0.35 cents per check; checks written, an average of 23 a month. (Do not round intermediate calculations. Input the answer as a positive value. Round your answer to 2 decimal places.) Net annual cost (b) Interest earnings of 7 percent with a $500 minimum balance; average monthly balance, $700; monthly service charge of $16 for falling below the minimum balance, which occurs three times a year (no interest earned in these months). (Do not round intermediate calculations. Input the answer as a positive value. Round your answer to 2 decimal places.) Net annual cost
(a) Monthly fee, $2.80; processing fee, $0.35 cents per check; checks written, an average of 23 a month. (Do not round intermediate calculations. Input the answer as a positive value. Round your answer to 2 decimal places.) Net annual cost (b) Interest earnings of 7 percent with a $500 minimum balance; average monthly balance, $700; monthly service charge of $16 for falling below the minimum balance, which occurs three times a year (no interest earned in these months). (Do not round intermediate calculations. Input the answer as a positive value. Round your answer to 2 decimal places.) Net annual cost
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
Problem 1PS
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Transcribed Image Text:What would be the net annual cost of the following checking accounts?
(a) Monthly fee, $2.80; processing fee, $0.35 cents per check; checks written, an average of 23 a month. (Do not round intermediate
calculations. Input the answer as a positive value. Round your answer to 2 decimal places.)
Net annual cost
(b) Interest earnings of 7 percent with a $500 minimum balance; average monthly balance, $700; monthly service charge of $16 for
falling below the minimum balance, which occurs three times a year (no interest earned in these months). (Do not round intermediate
calculations. Input the answer as a positive value. Round your answer to 2 decimal places.)
Net annual cost
Expert Solution
Step 1 (a) Net annual cost-
| Monthly fee | $2.80 |
| Average no. of checks per month | 23 |
| Processing fee @ $0.35 per check | $8.05 |
| Monthly cost | $10.85 |
| Net Annual Cost | $130.2 |
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