What would be the net annual cost of the following checking accounts? (a) Monthly fee, $3.85; processing fee, $0.30 cents per check; checks written, an average of 20 a month. Note: Do not round intermediate calculations. Input the answer as a positive value. Round your final answer to 2 decimal places. Net annual cost (b) Interest earnings of 7 percent with a $500 minimum balance; average monthly balance, $600; monthly service charge of $15 for falling below the minimum balance, which occurs three times a year (no interest earned in these months). Note: Do not round intermediate calculations. Input the answer as a positive value. Round your final answer to 2 decimal places.
What would be the net annual cost of the following checking accounts? (a) Monthly fee, $3.85; processing fee, $0.30 cents per check; checks written, an average of 20 a month. Note: Do not round intermediate calculations. Input the answer as a positive value. Round your final answer to 2 decimal places. Net annual cost (b) Interest earnings of 7 percent with a $500 minimum balance; average monthly balance, $600; monthly service charge of $15 for falling below the minimum balance, which occurs three times a year (no interest earned in these months). Note: Do not round intermediate calculations. Input the answer as a positive value. Round your final answer to 2 decimal places.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Transcribed Image Text:What would be the net annual cost of the following checking accounts?
(a) Monthly fee, $3.85; processing fee, $0.30 cents per check; checks written, an average of 20 a month.
Note: Do not round intermediate calculations. Input the answer as a positive value. Round your final answer to 2 decimal places.
Net annual cost
(b) Interest earnings of 7 percent with a $500 minimum balance; average monthly balance, $600; monthly service charge of $15 for
falling below the minimum balance, which occurs three times a year (no interest earned in these months).
Note: Do not round intermediate calculations. Input the answer as a positive value. Round your final answer to 2 decimal places.
Net annual cost
Expert Solution
Step 1
The bank charges a fee if the checking account balance falls below the minimum balance. The customer deposits in the savings bank account and earns interest. The bank also charges processing fees for clearing the check amount.
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