Question

What would be the net annual cost of the following checking account? Monthly fee : $7.35 Processing fee: $0.38 per check Checks written: Average of 67 a month Round your answer to the nearest whole number. Do not include the comma, period, and "$" sign in your response.

Answer 1

For calculating the net annual cost, we have to first calculate the monthly cost and then multiply it by 12. There are two costs involved, processing fees and monthly fees.

Annual processing fees calculation:

Processing fees = 0.38 per check

On an average, checks written in a month is 67,

so, monthly processing fees = 67 * 0.38 = 25.46

Now, Annual processing fess = 12 * 25.46 = 305.52

Annual Monthly fees calculation:

Monthly fees = 7.35

Annual monthly fees = 12 * 7.35 = 88.2

Now. total net annual cost = Annual processing fees + Annual monthly fees

Net Annual cost = 305.52 + 88.2 = 393.72

Rounded off net annual cost is 394