## How much profit does the bank make at the end of the year in this scenario? Scenario: In one year, a bank pays 2% interest on a<

Question

How much profit does the bank make at the end of the
year in this scenario?
Scenario: In one year, a bank pays 2% interest on a
$1,000 deposit. The same year, the bank charges 12% interest on a$1,000 loan.
$100$120
$140$2,000

in progress 0
2 weeks 2021-09-13T10:47:49+00:00 2 Answers 0

1. We have been given that in one year, a bank pays 2% interest on a  $1,000 deposit. The same year, the bank charges 12% interest on a$1,000 loan. We are asked to find the profit of bank at the end of one year.

Let us find amount paid by bank on deposit of $1,000 in one year by finding 2% of$1,000.

Now we will find the amount earned by bank on a loan amount of $1,000 in one year by calculating 12% of$1,000.

The profit made by bank would be amount earned minus amount paid.

Therefore, the bank will make a profit of at the end of the year and option A is the correct choice.