The amount requirement to recover the Minimum-Balance Fee is $49,950.
Further Explanation:
Saving account:
Saving account refers to the interest-bearing account where the bank pays a very low interest rate. The funds are easy to access to the account holder. Generally, the numbers of withdrawals in a month are limited. The interest earned on the saving account is subject to income tax. The bank does not charge for the maintenance of the saving account. The saving account provides the safety and nominal return on the funds.
Calculate the principle value:
The interest rate is 0.02% or 0.0002 and the minimum balance requirement is $9.99. The account holder has to maintain the balance which would earn the interest equal to the Minimum-Balance Fee. The principle value can be determined as follows:
\begin{aligned}\text{Principle}&=\frac{\text{Minimum balance requirement}}{\text{Interest rate}}\\&=\frac{\$9.99}{0.0002}\\&=\$49,950\end{aligned}
Thus, the amount requirement to recover the Minimum-Balance Fee is $49,950.
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Answer Details:
Grade: Senior school
Chapter: Banking
Subject: Economics
Keywords: interest rate, savings, account, 0.02%, approximately, money, you, need, keep, account, one, year, earn, enough, interest, cover, single, $9.99, Below-Minimum-Balance Fee.
