Pfin (with Mindtap, 1 Term Printed Access Card) (mindtap Course List)
7th Edition
ISBN: 9780357033609
Author: Randall Billingsley, Lawrence J. Gitman, Michael D. Joehnk
Publisher: Cengage Learning
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Chapter 4, Problem 5FPE
Calculating the net costs of checking accounts. Determine the annual net cost of these checking accounts:
- a. Monthly fee $4, check-processing fee of 20 cents, average of 23 checks written per month
- b. Annual interest of 1.5 percent paid if balance exceeds $750, $8 monthly fee if account falls below minimum balance, average monthly balance $815, account falls below $750 during four months
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Calculating the net costs of checking accounts. Determine the annual net cost of these checking accounts:
a. Monthly fee $4, check-processing fee of 20 cents, average of 23 checks written per month.
b. Annual interest of 1.5% paid if balance exceeds $750, $8 monthly fee if account falls between minimum balance, average monthly balance $815, account falls below $750 durng 4 months.
Determine the annual net cost of these checking accounts. A "-" sign must precede any negative net cost answers. Round your intermediate calculations to two decimal places.
Monthly fee $4, check-processing fee of 15 cents, average of 11 checks written per month. Round the answer to the nearest cent.
$
Annual interest of 3.5 percent paid if balance exceeds $800, $8 monthly fee if account falls below minimum balance, average monthly balance $850, account falls below $800 during 4 months. Round the answer to the nearest cent.
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
Chapter 4 Solutions
Pfin (with Mindtap, 1 Term Printed Access Card) (mindtap Course List)
Ch. 4 - Prob. 1LOCh. 4 - Describe todays financial services marketplace,...Ch. 4 - Prob. 3LOCh. 4 - Prob. 4LOCh. 4 - Prob. 5LOCh. 4 - Develop a cash management strategy that...Ch. 4 - Adapting to a low-interest-rate environment. A...Ch. 4 - Prob. 2FPECh. 4 - Choosing a new bank. Youre getting married and...Ch. 4 - Prob. 4FPE
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- 10. Comparing Costs of Checking Accounts. What would be the net annual cost of the following checking accounts? a. Monthly fee, $3.75; processing fee, $0.25 per check; checks written, an average of 22 a month. b. Interest earnings of 6 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). ype here to search 144 10 近arrow_forwardWhat would be the net annual cost of the following checking accounts? Monthly fee, $3.75; processing fee, 25 cents per check; checks written, an average of 14 a month. Interest earnings of 4 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).arrow_forwardWhat would be the net annual cost of thefollowing checking accounts? a. Monthly fee, $3.75; processing fee, 25cents per check; checks written, anaverage of 14 a month. b. Interest earnings of 4 percent with a$500 minimum balance; average monthlybalance, $600; monthly service charge of$15 for falling below the minimumbalance, which occurs three times a year(no interest earned in these months).arrow_forward
- What is the annual cost of a checking account with a monthly fee of $7.50 and a processing fee of $0.25 per check if you write an average of 2 checks per month?arrow_forwardWhat is would be the net annual cost of the following account? a. Montly fee,$3.75, processing fee,25 cents per check; checks written,an average of 14 month.( input the amount as a positive value)arrow_forwardWhat is the annual opportunity cost of a checking account that requires a $300 minimum balance to avoid service charges? Assume interest rate of 3%.arrow_forward
- What is the annual opportunity cost of a checking account that requires a $300 minimum balance to avoid service charges? Assume an interest rate of 3 percent.arrow_forwardFind the average daily balance for the credit card with the following transactions. Assume one month between billing dates using the proper number of days in the month. Then find the finance charge if interest is 1.5% per month on the average dally balance. Finally, find the new balance. Previous Balance: $556.32 Billing date: July 9 July 15, Return, $114.45 July 17, Purchase, $98.12 July 25, Purchase, $76.12 August 7, Payment, $110 What is the average daily balance? What is the finance charge? What is the new balance?arrow_forwardDavid received credit card applications from two different banks. The interest terms from the banks were as follows: Bank A : 15% compounded monthly Bank B : 14.8% compounded daily Calculate:a. The effective annual interest rate for bank A. b. The nominal interest rate for bank B. c. The effective monthly interest rate for Bank A.arrow_forward
- The credit card with the transactions described in the popup below uses the average daily balance method to calculate interest. The monthly interest rate is 1.5% of the average daily balance. Calculate parts a-d using the statement in the popup. a. Find the average daily balance for the billing period. Round to the nearest cent. The average daily balance for the billing period is $__?arrow_forwardThe credit card with the transactions described in the popup below uses the average daily balance method to calculate interest. The monthly interest rate is 1.2% of the average daily balance. a. Find the average daily balance for the billing period. Round to the nearest cent The average daily balance for the billing period is $__arrow_forwardThe credit card with the transactions described in the popup below uses the average daily balance method to calculate interest. The monthly interest rate is 1.2% of the average daily balance. Calculate parts a-d using the statement in the popup. a. Find the average daily balance for the billing period. Round to the nearest cent.arrow_forward
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