A NOW Account Requires a Minimum Monthly Balance of $500

question 29

Multiple Choice

A NOW account requires a minimum monthly balance of $500 if annual interest of 5 percent is to be earned monthly on its deposits.An account holder has maintained an average balance of $300 for the first nine months of the year and $800 for the last three months of the year.She has written an average of 20 checks a month and is not charged for these services.However, it costs the bank $0.02 to process each check. What is the average return (both explicit and implicit) earned by the account holder if the bank pays interest on only the amounts in excess of the required minimum of $200?

• A)2.01 percent.
• B)2.65 percent.
• C)3.78 percent.
• D)5.35 percent.
• E)6.13 percent.

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Definitions:

Quadriceps Femoris

The quadriceps femoris is a group of four muscles located at the front of the thigh, responsible for extending the knee and stabilizing the patella.

Anterior Thigh

The anterior thigh refers to the front part of the thigh, encompassing muscles like the quadriceps, which are responsible for knee extension.

Biceps Femoris

A muscle of the thigh part of the hamstring group, important in knee flexion and leg rotation.

Dorsiflexes

The action of moving the foot upward towards the shin, engaging muscles in the anterior part of the leg.