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 inerest to cover a single $9.99 Below-Minimum-Balance Fee?

Answer 1

ANSWER: $49,950

EXPLANATION: The savings account will need $49,950 to earn enough interest of $9.99 Below-Minimum-Balance Fee. The calculation is simple. Let the total money be P and we have a goal of $9.99. So, multiplying P with 0.02% should give the answer $9.99. Mathematically writing, the equation should be P x 0.02% = $9.99. The next step for solving the equation would be P = $9.99 ÷ 0.0002 which is $49,950.

Answer 2

For the answer to the question above.

The savings rate is 0.02%, then we can easily solve for the amount of money needed to annually generate the amount to cover the $9.99 fee.
We structure the equation as: $9.99 = 0.0002*B, where B is the balance. Dividing to solve for be, we get $49950, if there are choices. Just choose the closest answer.