The following question should be completed and brought to class. Some checking accounts pay a small amount of interest on the money in the account. In this case, interest is money that is paid to the account holder by the financial institution issuing the checking account. The interest is a percentage of the amount of money in the account. The percentage is called the annual percentage rate. You have \( \$ 1,000 \) to deposit in the account for 1 year. Compare the following two offers. - Bank of Avalon pays \( 0.8 \% \) with no annual fee. Which is the better offer? Show your work and then write a one- or two-sentence conclusion.

To compare the two offers, we need to calculate the interest earned from the Bank of Avalon for a deposit of \( \$1,000 \) at an interest rate of \( 0.8\% \) for one year. ### Calculation: 1. **Interest Rate**: \( 0.8\% \) can be expressed as a decimal by dividing by \( 100 \): \[ 0.8\% = \frac{0.8}{100} = 0.008 \] 2. **Interest Earned**: The interest earned can be calculated using the formula: \[ \text{Interest} = \text{Principal} \times \text{Rate} \times \text{Time} \] where: - Principal = \( \$1,000 \) - Rate = \( 0.008 \) - Time = \( 1 \) year Plugging in the values: \[ \text{Interest} = 1000 \times 0.008 \times 1 = 8 \] 3. **Total Amount After 1 Year**: The total amount in the account after one year will be: \[ \text{Total Amount} = \text{Principal} + \text{Interest} = 1000 + 8 = 1008 \] ### Conclusion: The Bank of Avalon offers an interest of \( \$8 \) on a \( \$1,000 \) deposit for one year, resulting in a total of \( \$1,008 \) after one year. Since there are no annual fees, this is a straightforward offer. If there are no other offers to compare, the Bank of Avalon is a reasonable choice for earning interest on your checking account.