Use the Following Information to Answer the Question

question 54

Multiple Choice

Use the following information to answer the question. A current deposit account requires a minimum balance of $500 if annual interest of 5 per cent 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 cheques a month and is not charged for these services. However, it costs the bank $0.02 to process each cheque.
The bank would like to limit the average return (both explicit and implicit) earned by the account holder to 5 per cent per year. How much should it charge for processing each check to this Account holder assuming that it will pay annual interest of 5 per cent and minimum balances of $200 are maintained?

• A) 1 cent per cheque
• B) 2 cents per cheque
• C) 3 cents per cheque
• D) 4 cents per cheque.

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Definitions:

Spina Bifida

A birth defect where there is incomplete closing of the backbone and membranes around the spinal cord.

Herniated Disk

A condition in which the nucleus pulposus (the soft, gelatinous center) of the spinal disk bulges or ruptures through a tear in the tougher, outer ring, potentially causing pain and nerve irritation.

Annulus Fibrosus

The tough, outer ring of intervertebral discs designed to contain the nucleus pulposus and distribute pressure evenly across the disc.

Nucleus Pulposus

The inner core of the vertebral disc, composed of a jelly-like material that helps absorb shock and maintain spine flexibility.