A NOW account requires a minimum monthly balance of $500 if annual interest of 5 percent is to be earned monthly on its deposits. An account holder has maintained an average balance of $300 for the first nine months of the year and $800 for the last three months of the year. She has written an average of 20 checks a month and is not charged for these services. However, it costs the bank $0.02 to process each check.
-What is the average return earned (both explicit and implicit) by the account holder over the full year?
A)2.98 percent.
B)3.48 percent.
C)4.28 percent.
D)4.79 percent.
E)5.35 percent.

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The Answer of A NOW account requires a minimum monthly balance of $500 if annual interest of 5 percent is to be earned monthly on its deposits. An account holder has maintained an average balance of $300 for the first nine months of the year and $800 for the last three months of the year. She has written an average of 20 checks a month and is not charged for these services. However, it costs the bank $0.02 to process each check.
-What is the average return earned (both explicit and implicit) by the account holder over the full year?
A)2.98 percent.
B)3.48 percent.
C)4.28 percent.
D)4.79 percent.
E)5.35 percent.

A NOW Account Requires a Minimum Monthly Balance of $500