You opened a u. s. bank's standard savings account in january of this year with a 3% annual interest rate but there is a monthly maintenance fee of $4, which you can get waived if you keep a $300 minimum daily balance. if you can only keep up a $250 minimum balance, are you making money or losing money in the account?

losing money

Explanation:

A monthly maintenance fee of 4 percent translates to an annual fee of 48 percent.  This means that the bank will deduct 48 percent from the deposit every year as maintenance fees. The account will be earning 3 percent per year as interest. A comparison of the 3 percent gain and 48 percent deductions, shows account is losing money. Every year, the account will lose 45 percent of the deposits.

For the account to earn money, the annual interest rate must be greater than the yearly maintenance fee. For this case, if the annual interest rate were at 12 percent and maintenance fee at 4 percent, the account would make money. In real life, an individual should also consider the inflation rate.