Question

You have an account that requires a minimum monthly balance of $5000 if the annual interest of 4 percent is to be earned monthly on its deposits. An account holder has maintained an average balance of $1000 for the first eight months of the year and $2000 for the last four months of the year. You have written an average of 15 checks a month and are not charged for these services. However, it costs the bank $0.03 to process each check. What is the average return earned (both explicit and implicit) by you the account holder over the full year if the minimum balance is reduced to $2000?

Answer #1

Firebird Corp. prepares monthly bank reconciliations of its
checking account balance. The bank statement for February 2019
indicated the following:
Balance, February 28, 2019
$87,392
Service charge for February
100
Interest earned during February
875
NSF check from Valerie Corp. (deposited by Firebird)
630
Note ($12,000) and interest ($350) collected from a customer of
Firebird’s
12,350
An analysis of canceled checks and deposits and the records of
Firebird Corp. revealed the following items:
Checking account balance per Firebird’s books
$73,260...

a) You have an account at Bank A. Your last balance statement
shows an ending balance of $100. This month you deposit $750 in
your account and withdrew $350. The you wrote 9 checks, four of
which clears. The checks that have cleared totals $400. The last
remaining check total $370. You will pay a $25 fee to the bank that
month. What is the adjusted bank balance (accounting for the
unclear checks as well)? Show work.
b) What is...

You have an account with annual interest rate 6% compounded
monthly. You will deposit $120 at the end of each month for 10
years into this account, leave the account untouched for 5 years,
and then withdraw equal amounts at the end of each month for the
following 15 years, ending with a balance of $15,000. What will
your monthly withdrawals be?

1) You deposit $500 each month into an account earning 3%
interest compounded monthly.
a) How much will you have in the account in 25 years?
b) How much total money will you put into the account?
c) How much total interest will you earn?
2) Suppose you invest $190 a month for 6 years into an account
earning 7% compounded monthly. After 6 years, you leave the money,
without making additional deposits, in the account for another 21
years....

You open a saving account that pays a nominal annual interest of
12% which compounds monthly. In this account, you will make equal
deposits during the 0, 2, and 4th month. Starting the 6th month,
you are planning to withdraw $ 150 for four consecutive months. How
much do you need to deposit in order to have $ 45 after the fourth
withdrawal of money?
NOTE: This is for my ChemE Numerical Methods class and the
Accounting folks can't seem...

Use the following check register for the month of April and the
monthly account summary to answer the following question:
Check Regester
Check #
Date
Payee/Description
Payment
Deposit
Balance
$750
93
4/02
Gas station/groceries and gas
$52
$698
4/08
Cash (ATM)
$40
$658
4/15
Paycheck
$275
$933
94
4/18
P&T/groceries
$78
$855
4/20
Cash (ATM)
$40
$815
95
4/25
WalStores/video games
$33
$782
4/28
Cash (ATM)
$25
$757
4/30
Paycheck
$275
$1032
Monthly Account Summary
Account Number
Account Type
Balance...

You deposit $2000 in an account earning 3% interest compounded
monthly
How much will you have in the account in 20 years?
How much interest will you earn?
You deposit $10,000 in an account earning 4% interest compounded
monthly.
How much will you have in the account in 25 years?
How much interest will you earn?

Cornerstone Exercise 4-16
Bank Reconciliation
Firebird Corp. prepares monthly bank reconciliations of its
checking account balance. The bank statement for February 2019
indicated the following:
Balance, February 28, 2019
$87,392
Service charge for February
100
Interest earned during
February
875
NSF check from Valerie Corp.
(deposited by Firebird)
630
Note ($12,000) and interest ($350)
collected from a customer of Firebird’s
12,350
An analysis of canceled checks and deposits and the records of
Firebird Corp. revealed the following items:
Checking account...

FINANCE
5.
5A.
You deposit $5000 in an account earning 8% interest compounded
monthly. How much will you have in the account in 15
years?
5B.
You can afford a $350 per month car payment. You've found a 3
year loan at 2% interest. How big of a loan can you
afford?
5C.
You have $300,000 saved for retirement. Your account earns 5%
interest. How much will you be able to pull out each month, if you
want to be...

Suppose you deposited $5000 on January 1, 2014, in a savings
account paying 5% annual interest, with interest credited to the
account on December 31 of each year. On January 1, 2016, the annual
interest rate changes to 4.25%. What wil be the balance in your
account on January 1, 2030?

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