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) $4.25 $5.50 $6.75 $7.25

Answer 1

To calculate the income earned in one month on the checking account, we can start by calculating the interest earned based on the account balance.

1. Interest earned from the account:

   • The monthly interest rate is 0.75%.
   • The account balance is $1,000.

   \[ \text{Interest earned} = \text{Account balance} \times \text{Monthly interest rate} \] \[ \text{Interest earned} = 1000 \times 0.0075 = 7.5 \]

2. Monthly financial charge:

   • There is a $2.00 financial charge.

3. Income earned in one month: \[ \text{Net income} = \text{Interest earned} - \text{Financial charge} \] \[ \text{Net income} = 7.5 - 2.0 = 5.5 \]

Thus, the income earned in one month on the checking account for a customer with an account balance of $1,000 is $5.50.

So the correct answer is $5.50.