Now accounts require an account with a minimum balance of $750 to earn 4% per annum interest. The average balance held by an account holder during the first six months of the year was $500 and the last six months was $1,000. The account holder issues an average of 60 checks a month and pays a fee of $0.02 per check. It costs the bank $0.05 to clear a check.

 (1). What is the average income earned by the account holder from a NOW account?

(2). If the bank reduced the minimum balance to S400, what would be the average return?

(3). How much should a bank raise its checking-clearing fees to ensure that it pays an average interest rate of 5% on this type of account, assuming that the required minimum balance is S750?