Question
At River Bank, checking account customers earn 0.75% interest a month on their account balances, pay no service fees for writing checks, and pay a monthly $2.00 financial charge. Calculate the income earned in one month on the checking account for a customer with an account balance of $1,000. (1 point) Responses $4.25 $4.25 $5.50 $5.50 $6.75 $6.75 $7.25
Answers
GPT-4o mini
To calculate the income earned in one month on the checking account, we first calculate the interest earned and then subtract the financial charge.
1. **Calculate the interest earned:**
Interest rate = 0.75% per month
Account balance = $1,000
Interest earned = Account balance × Interest rate
Interest earned = $1,000 × 0.0075 = $7.50
2. **Subtract the financial charge:**
Financial charge = $2.00
Net income = Interest earned - Financial charge
Net income = $7.50 - $2.00 = $5.50
Therefore, the income earned in one month on the checking account for a customer with an account balance of $1,000 is **$5.50**.
1. **Calculate the interest earned:**
Interest rate = 0.75% per month
Account balance = $1,000
Interest earned = Account balance × Interest rate
Interest earned = $1,000 × 0.0075 = $7.50
2. **Subtract the financial charge:**
Financial charge = $2.00
Net income = Interest earned - Financial charge
Net income = $7.50 - $2.00 = $5.50
Therefore, the income earned in one month on the checking account for a customer with an account balance of $1,000 is **$5.50**.