Question

the ABC Company has a monthly collected balance of $600,000. Its bank pays an earning credit rate of 0.75%. The Reserve Requirement Ratio is 10%. Given 30 days in the month, What is ABC's monthly earnings credit?

Answer 1

Answer: $332.1

Step-by-step explanation:

Given that,

Monthly collected balance = $600,000

Bank pays an earning credit rate = 0.75%

Reserve Requirement Ratio = 10% of $600,000

= $60,000

Investable amount = Monthly collected balance - Reserve requirement amount

= $600,000 - $60,000

= $540,000

ABC's monthly earnings credit:

= Investable amount × Earning credit rate × Time period

= 540,000 × 0.75% ×
`(30)/(365)`

= $332.1