23. Jeremy had a starting balance of $122.00 in his savings passbook. He made these transactions: Deposits of $68.52 and $46.35; Withdrawals of $95.00 and $20.50; Interest $1.50. What is his final balance? (Points : 2)
$125.22
$120.22
$112.22
$122.87
24. Banks pay interest on savings accounts because (Points : 2)
They are just nice.
They want to encourage you to save.
They want to attract more customers.
They invest the money.
I'll be glad to check your answers.
To get the answer to question 23, we need to add up the deposits, subtract the withdrawals, and then add the interest to the starting balance.
Starting balance: $122.00
Deposits: $68.52 + $46.35 = $114.87
Withdrawals: $95.00 + $20.50 = $115.50
Interest: $1.50
Now let's calculate the final balance:
Starting balance + Deposits - Withdrawals + Interest
$122.00 + $114.87 - $115.50 + $1.50 = $122.87
Therefore, the final balance is $122.87.
Now, to answer question 24, banks pay interest on savings accounts for various reasons:
- They want to encourage you to save: By offering interest, banks provide an incentive for individuals to keep their money in savings accounts rather than spending it. This promotes the habit of saving and helps individuals meet their financial goals.
- They want to attract more customers: Offering competitive interest rates can attract more customers to open savings accounts with a particular bank. As banks compete for customers, interest rates can be a determining factor for individuals looking for a place to save their money.
- They invest the money: Banks do not keep all the deposited money idle in savings accounts. Instead, they invest a portion of it in various financial instruments such as loans, mortgages, and bonds. The interest earned from these investments allows the banks to pay interest on the savings accounts while still making a profit.
So, the correct answer to question 24 is: They want to encourage you to save.