Question

If the interest rate on a savings account is 0.018%, 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?

$55,555
$55
$555
$5,555

Answer 1

The interest from an investment is calculated through the equation,

I = P x i

Where I is the interest, P is the principal amount and i is the interest rate.

P = I / i

Substituting the known values,

P = ($9.99) / (0.018/100) = $55,500

The nearest value to the obtained value above is $55,555. Thus, the answer to this item is the first choice.