Assume the average management cost per account per year is $200 and the average fees earned per account per year is $170. The average annual size of account is $1800. What is the average implicit interest rate (round to two decimals)?
A) -1.67 per cent
B) 1.67 per cent
C) 4.86 per cent
D) 15 per cent

Question

Quizplus · Accepted Answer

Implicit interest rate = (Fees earned - Management cost) / Average account size * 100= (170 - 200) / 1800 * 100= -1.67%

Assume the Average Management Cost Per Account Per Year Is