Question

Mike's checking account pays 0.5% interest monthly and has a $7.50 service fee. If Mike's balance last month was $1423, find the amount of credit or debit to his account after interest and service fee are both applied.

Answer 1

(1,423×0.005)−7.50
=−0.385 debit

Answer 2

The balance in the account when debit and credit is $1422.615.

Explanation:

As given

Mike's checking account pays 0.5% interest monthly and has a $7.50 service fee.

If Mike's balance last month was $1423.

Than

0.5% is written in the decimal form.

`= (0.5)/(100)`

= 0.005

Thus

Monthly interest price = 0.005 × 1423

= $7.115

As given

service fee = $7.50

As the service tax is greater than the monthly interest price.

Thus

Debit = $7.50 - $7.115

= $0.385

The balance in the account when debit and credit = $1423 - $0.385

The balance in the account when debit and credit = $1422.615

Therefore the balance in the account when debit and credit is $1422.615 .