Sam Has a Bank Account That Pays Interest Calculated on the Daily

question 82

Short Answer

Sam has a bank account that pays interest calculated on the daily closing balance and paid monthly as follows: $0 to $5,000, 0.2%, $5,000 to $10,000, 0.25%, and over $10,000, 0.30%. Sam had $17,000 in his account on April 1. He withdrew $5,000 on April 15, withdrew another $5,000 on April 20, and deposited $2,000 on April 25. Calculate the interest that he will be paid for the month of April.

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Definitions:

Tax-Exempt Interest

This is interest income that is not subject to federal income tax, and in some cases, state or local taxes. Such interest is often earned from bonds issued by municipal, state, or other government entities.

Educational Assistance

Programs or benefits provided by employers or the government to help cover education expenses for students.

Fringe Benefit

Additional compensation provided to employees beyond their normal wages, such as health insurance, company cars, or retirement plans.

Employer-Paid Premiums

Payments made by an employer towards their employees' health insurance or other benefits, usually part of an employee's compensation package.