Reference no: EM133021618

Question - Consider a depositor who holds on average $250 per month for the first three months of the year, $500 per month for the next three months, and $1000 per month for the final six months of the year in a NOW account. The NOW account pays 5 percent per annum if the minimum balance is $500 or more, and it pays no interest if the account falls below $500. The depositor writes an average of 50 checks per month and pays a service fee of 100 cents for each check although it costs the bank 15 cents to process each check. Calculate the account holder's gross interest return.