A bank determines from an analysis of its cost-accounting figures that for each $500 minimum-balance checking account it sells, account processing and other operating costs will average $4.87 per month and overhead expenses will run an average of $1.21 per month. The bank hopes to achieve a profit margin over these particular costs of 10 percent of total monthly costs. What monthly fee should it charge a customer who opens one of these checking accounts?
Answer to relevant QuestionsTo price deposits successfully, service providers must know their costs. How are these costs determined using the historical average cost approach? The marginal cost of funds approach? What are the advantages and ...What is lifeline banking? What pressures does it impose on the managers of banks and other financial institutions?Fine-Tuned Savings Association finds that it can attract the following amounts of deposits if it offers new depositors and those rolling over their maturing CDs at the interest rates indicated below:Expected Volume of New ...Compare and contrast Fed funds transactions with RPs.What factors must the manager of a financial institution weigh in choosing among the various nondeposit sources of funding available today?
Post your question