A DI offers a $500 minimum balance NOW account paying 5.5 percent annual interest. The account has a service charge of $0.05 per check, and processing costs per check are $0.15. The customer maintains a balance of $1,000, and averages 150 checks per year. What is the annual gross interest return on this account to the customer?

Question

Quizplus · Accepted Answer

The annual gross interest return is calculated by multiplying the balance by the interest rate: $1,000 * 5.5% = $55.00. However, the question asks for the gross interest return, which does not account for service charges or processing costs. Therefore, the correct answer is $55.00.

A DI Offers a $500 Minimum Balance NOW Account Paying