Finance

Determine the annual net cost of this checking account?

Annual interest of 2.5% paid if balance exceeds $750, $8 monthly fee if account falls below minimum balance, average balance $815, account falls below $750 during 4 months.

Is my answer correct?

815 * .025 * 4/12=$6.69 yearly interest lost

$8.00 * 4 = $32.00 fee for account falling below minimum balance.

$6.69 + $32.00 = $38.69 yearly net cost

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  1. Revised answer:

    815*.025*8/12= $13.79

    $8.00*4= $32.00

    32.00 - 13.79= $18.42 net cost

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