1. Use the following assumptions to determine the determine the collected balance that would be required to offset a monthly service charge of $400:

Ledger Balance =$300,000

Deposit Float =$100,000

Monthly Earnings Credit =$165

Days in Month = 30 days

Reserve Requirement Ratio = 10%

a. 1.12%

b. 112%

c. 1.56%

d. 0.011%

e. 2.35%

2. Trade credit terms of 2/10 net 60 are offered. What is the annualized cost of missing the trade credit discount?

a. 25.09%

b. 2.04%

c. 14.90%

d. 37.24%