Calculate Average Implicit Interest Rate And Gross Interest Return Calculation

Question
1. What is the average implicit interest rate on a \$100,000 account if the bank's average management costs are \$2,500 and annual fees average \$1,750?
a.    4.25 percent.
b.    2.50 percent.
c.    1.75 percent.
d.    0.75 percent.
e.    -0.75 percent.

2. An FI offers a \$2,500 minimum balance NOW account paying 4 percent annual interest, and there are no service charges as long as the customer maintains the minimum balance.  The customer maintains a balance of \$5,000, and averages 750 checks per year.  Each check has a processing cost to the FI of \$0.15.  What is the annual gross interest return on this account to the customer?
a.    \$112.50.
b.    \$100.00.
c.    \$312.50.
d.    \$137.50.
e.    \$212.50.

Summary

These multiple choice questions belong to Finance. The 1st question is about calculating the average implicit interest rate for \$100,000 with average management cost and annual fees added. The 2nd question is about calculation of gross interest return by a bank which offers \$2500 minimum balance account and 4% interest rate.

Total Word Count 23

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