Question: 1. Use the following information from an account analysis statement to answer the following questions: Collected balance = $500,000 Service charges = $5,000 Reserve requirement

1. Use the following information from an account analysis statement to answer the following questions: Collected balance = $500,000 Service charges = $5,000 Reserve requirement ratio of 10 percent Days in month = 30 days Earnings credit rate = 0.60 percent a. Calculate the monthly earnings credit allowance and the net service charges. b. Solve for the collected balances required and interpret the value. c. Suppose that the earnings credit rate is re-negotiated upward to 0.75 percent. Recalculate the earnings credit allowance, net service charge, and collected balance required.

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