Question

If the interest rate on a savings account is 0.02%, approximately how much money do you need to keep in this account for 1 year to earn enough interest to cover a single $9.99 Below-Minimum-Balance Fee

Answer 1

In this question, the interest rate is 0.02% and you need to have $9.99 interest to cover the fee. To find the bank account needed, you need to divide the target interest value with the interest rate. The calculation would be:

interest = bank account * interest rate
$9.99 = bank account * 0.02%
bank account = $9.99/ 0.02% (don't forget the % mean 1/100)
bank account = $49,950