From an analysis on its deposits,a bank determines that account processing and other operating expenses cost the bank $3.95 per month.It has also determined that non-operating expenses on its deposits are $1.35 per month.The bank wants to have a profit margin which is 10 percent of monthly costs.What monthly fee should the bank charge on its deposit accounts?
A)$5.30 per month
B)$3.95 per month
C)$5.83 per month
D)$5.70 per month
E)None of the options is correct

Question

Quizplus · Accepted Answer

To determine the monthly fee, we need to add the operating expenses and non-operating expenses and add a profit margin of 10%:

Monthly cost = $3.95 + $1.35 = $5.30
Profit margin = 10% of $5.30 = $0.53
Monthly fee = $5.30 + $0.53 = $5.83

Therefore, the bank should charge a monthly fee of $5.83 on its deposit accounts. Therefore, the best choice is (C).

From an Analysis on Its Deposits,a Bank Determines That Account