Kayla Deposits $1,500 into a NOW Account That Requires a Minimum

question 25

Multiple Choice

Kayla deposits $1,500 into a NOW account that requires a minimum balance of $500 and offers an interest rate of 2.4%. How much interest will she earn in one year in the NOW account?

• A) $360
• B) $24
• C) $12
• D) $36

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Definitions:

Income Statement

A financial statement that reports a company's financial performance over a specific period, showing revenue, expenses, and net income or loss.

Contribution Margin Ratio

A financial metric that shows what percentage of sales revenue is available to cover variable costs and contribute to fixed costs and profits.

Fixed Monthly Expenses

Regular expenses that do not vary in amount and occur every month, such as rent or mortgage payments.

Net Operating Income

A company's operating profit after subtracting operating expenses from revenue, excluding non-operating activities like taxes and interest.