Question

C. Assume someone has an average balance account with a bank that costs $35 a month but earns
1% interest per month. If in September (30 days) the account had $100,000 in it until the 15th and
then $95,000 from the 15th to the 30th, what is the interest earned (be sure to subtract the $35 fee
for the month)?​

Answer 1

Answer:

The total interest earned after subtracting the monthly $35

service fee = $975 - $35 = $940

Step-by-step explanation:

Bank fee cost per month = $35

Interest rate per month = 1%

The total amount in the account until the 15th = $100,000

The total amount in the account from the 15th to the 30th = $95,000

Interest Earned?

Interest earned for first 15 days:

                               = $100,000 times 1%/2

                               = $100,000 times 0.001/2

                               = $500

Interest earned from 15th to the 30th:

                                 = $95,000 times 1%/2

                                 = $95,000 times 0.001/2

                                 = $475

Interest earned for first 15 days + Interest earned from 15th

to the 30th =  $500 + $475 = $975

So, the total interest earned after subtracting the monthly $35

service fee = $975 - $35 = $940

Keywords: interest, interest rate

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