Trim Gym has a monthly collected balance of $500,000. Simmons First Bank (Trim Gym's relationship lender) pays a 0.60% earnings credit rate. The legal reserve ratio is 10%.

a. If there are 30 days in the month, calculate the Trim Gym monthly earnings credit.

b. Suppose the owner of the Trim Gym can renegotiate the income credit rate to 0.75%. How much will the earnings credit increase from your answer to part a?

Answer rating: 100% (QA)

Solution a To calculate the monthly earnings credit we need to first determine the porti... View the full answer