Dividend Calculations on a Tiered-Rate Account

Question – How are dividends calculated for tiered rate accounts? For example, is it appropriate for accounts that pay a 1.5 percent dividend rate on balances up to $1,000 and a 0.5 percent dividend rate on balances greater than $1,000 to pay a 1.5 percent dividend on a $2,000 balance? Is it appropriate for accounts to pay 1.5 percent on the first $1,000 and then 0.5 percent on the second $1,000?