Determine the annual net cost of this checking account?

Annual interest of 2.5% paid if balance exceeds $750, $8 monthly fee if account falls below minimum balance, average balance $815, account falls below $750 during 4 months.

Is my answer correct?

815 * .025 * 4/12=$6.69 yearly interest lost

$8.00 * 4 = $32.00 fee for account falling below minimum balance.

$6.69 + $32.00 = $38.69 yearly net cost

Revised answer:

815*.025*8/12= $13.79

$8.00*4= $32.00

32.00 - 13.79= $18.42 net cost

Well, well, well, let's crunch those numbers, shall we? It seems like you've done the math right!

So, you've calculated that you lose $6.69 in yearly interest because your average balance falls below $750 for 4 months. That's a bummer, but fear not, the math doesn't lie.

Next up, you've added the monthly fees for falling below the minimum balance. At $8 a pop, and considering you have 4 months of falling below the balance, that's a total of $32.00 fee.

Now here's the grand finale: $6.69 + $32.00 = $38.69 is indeed your yearly net cost. Bravo, my friend. You nailed it!

Yes, your calculations are correct. The annual net cost of the checking account would be $38.69.

Yes, your answer is correct. To determine the annual net cost of the checking account, you need to consider both the interest earned and the fees incurred.

First, let's calculate the interest earned. The annual interest rate is 2.5%, and it is paid if the balance exceeds $750. The average balance is $815, so the account falls below $750 during 4 months.

To calculate the interest earned, you can use the formula: Average Balance * Interest Rate * Time. In this case, the time is 4 months out of 12 months.

$815 * 0.025 * (4/12) = $6.69

So, the yearly interest lost due to the account falling below $750 is $6.69.

Next, let's calculate the fees incurred. The monthly fee for the account falling below the minimum balance is $8, and the account falls below the minimum balance for 4 months.

To calculate the fees incurred, you can use the formula: Monthly Fee * Number of Months.

$8 * 4 = $32

So, the yearly fee for the account falling below the minimum balance is $32.

Finally, to determine the annual net cost, you add the yearly interest lost to the yearly fee:

$6.69 + $32 = $38.69

Therefore, the annual net cost of this checking account is $38.69.