This is the minimum transfer amount that would justify the cost of a wire transfer as opposed to a DTC if the difference in cost were $12.00 per transfer. The difference in cost is only $10.50, because the current DTC cost is $1.50 per transfer, and the cost of a wire transfer is $12.00.
This is the minimum transfer amount that would justify the cost of a wire transfer as opposed to a DTC if using the wire transfer were to speed up the funds transfer by one day. However, the funds transfer would be speeded up by two days.
In order for the wire transfer cost to be justified, the interest earned by investing the funds 2 days earlier needs to be equal to or greater than the difference between the cost for the wire transfer ($12.00) and the cost for the depository transfer check ($1.50), which is $10.50. We know the interest rate (9%) and the amount of time (2 days), so we need to find the investable funds balance that will result in interest of $10.50 for two days. We will let "InvBal" be our unknown. The formula is: InvBal × .09 ÷ 360 × 2 = $10.50 Solving for InvBal: First, we can simplify the equation by performing the mathematics, i.e., multiplying and dividing .09 ÷ 360 × 2. When we do that, we get .0005. Now, our formula looks like this: InvBal × .0005 = $10.50 InvBal = 10.50 ÷ .0005 InvBal = $21,000 So the minimum transfer amount that would justify the cost of a wire transfer as opposed to a DTC is $21,000.
This is the minimum transfer amount that would justify the cost of a wire transfer as opposed to a DTC if the difference in cost were $13.50 per transfer. The difference in cost is only $10.50, because the current DTC cost is $1.50 per transfer, and the cost of a wire transfer is $12.00.
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