Question: A bank that provides overdraft protection charges 12 percent for each $100 (or portion of $100) borrowed when an overdraft occurs.
a. What amount of interest would the customer pay for a $188 overdraft? (Assume the interest is for the full amount borrowed for a whole year.)
b. How much would be saved by using the overdraft protection loan if a customer has three overdraft charges of $30 each during the year?