What is the annual opportunity cost of a checking account that requires a minimum balance...
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What is the annual opportunity cost of a checking account that requires a minimum balance of $270 to avoid service charges? Assume an interest rate of 2.5 percent (Round your answer to 2 decimal places.) Opportunity cost A bank that provides overdraft protection charges 9 percent for each $100 (or portion of $100) borrowed when an overdraft occurs. a. What amount of interest would the customer pay for an overdraft of $160? (Assume the interest is for the full amount borrowed for a whole year) (Round your answer to 2 decimal places.) Interest amount b. How much would be saved by using the overdraft protection loan if a customer has two overdraft charges of $40 each during the year? Savings
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