Question

The balance of Stephanie's average balance checking account at the beginning of last cycle was $200, and the only transaction for the cycle was a check that Stephanie wrote for $100, which cleared exactly halfway through the cycle. On what amount did Stephanie's checking account pay interest last cycle?

Answer 1

Banks pay pay interest on a daily basis compounded 365 days a year. They would have paid interest on $200 for the first half of the month and $100 for the second half of the month. This averages out to $100. If this is a homework question, then the answer is $150. AVERAGE OF BOTH HALF YEARS = (200+100)/2 happens to = $150,