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

Question

Sphinxa [80]

4 years ago

7

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?

Mathematics

2 answers:

astraxan [27] · Answer 1 · 2022-01-21T13:07:14+03:00

At first glance, this problem might be overwhelming so try approaching it slowly by doing these steps:

Step 1: Start by understanding what the problem is really asking.
You might notice that the problem is just a percentage problem, with a twist! If you still don't see it, the problem is just asking what the base should be given a percentage and the amount.

Step 2: Recall the concepts relevant to the question.
We can identify a single formula that will be important in getting the answer:
$base*percent=amount$

Step 3: Apply the concept to the context of the problem.
You'll see that we already have the percent from the interest rate which is 0.02% and the amount from the below-minimum-balance fee which is $9.99.

There goes the little twist: you have to manipulate the equation to get the base. Dividing both sides of the equation by the percent we'll have:
$base= \frac{amount}{percent}$

Step 4: Evaluate to get the answer to the problem.
We simply substitute the given numbers and evaluate.
$base= \frac{percent}{amount}= \frac{9.99}{0.0002} =49,950$

Answer: You need $49,950 in the account to cover the Below-Minimum-Balance Fee from your interest.