D N Problem #10 Requirement a: Monthly fees $ 3.75 Processing fee per check $ 0.25 Average checks written per month 22 Annual fees $ 45 Monthly fees * 12 Annual check processing fees 6 Processing fee per check * Average checks written per month * 12 Net annual cost $ 248 Annual fees + Annual check processing fees Requirement b: Service fees falling below minimum balance: Monthly service fee $ 500 Months below minimum balance 3 Total service fees $ 1,500 Monthly service fee * Months below minimum balance Interest earnings: Average monthly balance Annual interest rate Months above minimum balance Total interest earnings Average monthly balance * Annual interest rate * Months above minimum balance / 12 Net annual cost Total service fees - Total interest savings #10 #11 + LO5-5 10. Comparing Costs of Checking Accounts. What would be the net annual cost of the following checking accounts? a. Monthly fee, $3.75; processing fee, $0.25 per check; checks written, an average of 22 a month. b. Interest earnings of 6 percent with a $500 minimum balance; average monthly balance, $600; monthly service charge of $15 for falling below the minimum balance, which occurs three times a year (no interest earned in these months)