A NOW Account Requires a Minimum Monthly Balance of $500

question 118

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. The bank would like to limit the average return (both explicit and implicit) earned by the account holder to 5 percent per year.How much should it charge for processing each check to this Account holder assuming that it will pay annual interest of 5 percent and minimum balances of $200 are maintained?

• A)1 cent per check.
• B)2 cent per check.
• C)3 cent per check.
• D)4 cent per check.
• E)5 cent per check.

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Definitions:

Impression Management

The process by which individuals attempt to control or manipulate the perceptions others have of them, often to appear more favorable or competent.

Personal Characteristics

Are the traits, attributes, or qualities that define an individual’s distinct personality and behavioral tendencies.

Message Content

The actual information or meaning conveyed in a communication act.

Inoculation Effect

A psychological phenomenon where exposure to a weakened form of an argument increases later resistance to that argument.