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Vildur has [tex]$\$[/tex]800[tex]$ to open a checking account. He can maintain a minimum balance of at least $[/tex]\[tex]$500$[/tex]. He plans to use the ATM twice a month and he maintains a savings account at the same bank. His employer has direct deposit and he sometimes overdrafts his account.

- Bank Account Terms and Conditions

\begin{tabular}{|c|c|c|c|c|}
\hline
& A & B & C & D \\
\hline
\begin{tabular}{l}
Minimum \\
Balance
\end{tabular} & [tex]$\$[/tex]500[tex]$ & $[/tex]\[tex]$250$[/tex] & [tex]$\$[/tex]300[tex]$ & $[/tex]\[tex]$100$[/tex] \\
\hline
Interest & [tex]$0.2\%$[/tex] & [tex]$0\%$[/tex] & [tex]$0.02\%$[/tex] & [tex]$0\%$[/tex] \\
\hline
\begin{tabular}{l}
Overdraft \\
Fees
\end{tabular} & \begin{tabular}{l}
[tex]$\$[/tex]0[tex]$ if linked \\
with savings \\
account or \\
$[/tex]\[tex]$40$[/tex] per \\
overdraft
\end{tabular} & \begin{tabular}{l}
[tex]$\$[/tex]35[tex]$ per \\
overdraft
\end{tabular} & \begin{tabular}{l}
$[/tex]\[tex]$25$[/tex] per \\
overdraft
\end{tabular} & \begin{tabular}{l}
[tex]$\$[/tex]25[tex]$ per \\
overdraft
\end{tabular} \\
\hline
\begin{tabular}{l}
ATM \\
Usage/Fees
\end{tabular} & \begin{tabular}{l}
$[/tex]\[tex]$0$[/tex] for all \\
ATMs
\end{tabular} & \begin{tabular}{l}
[tex]$\$[/tex]0[tex]$ for ABC \\
bank ATMs \\
$[/tex]\[tex]$3$[/tex] for non- \\
ABC bank \\
ATMs
\end{tabular} & \begin{tabular}{l}
[tex]$\$[/tex]4[tex]$ per \\
transaction
\end{tabular} & \begin{tabular}{l}
$[/tex]\[tex]$3$[/tex] per \\
transaction
\end{tabular} \\
\hline
\end{tabular}



Answer :

GinnyAnswer
To determine the best bank for Vildur to open a checking account with, we should analyze the final net balance he would have after considering interest rates and ATM usage fees. Here are the conditions for each bank along with the important points:

1. Bank A:
- Minimum Balance: \[tex]$500 - Interest Rate: 0.2% - Overdraft Fee: \$[/tex]0 (when linked with a savings account)
- ATM Fee: \[tex]$0 for all ATMs Given Vildur has \$[/tex]800 to start with:

- Interest earned: [tex]\(800 \times 0.002 = \$1.60\)[/tex]
- ATM fees for 2 transactions: [tex]\( 2 \times \$0 = \$0 \)[/tex]

Net balance in Bank A: [tex]\( \$800 + \$1.60 - \$0 = \$801.60\)[/tex]

2. Bank B:
- Minimum Balance: \[tex]$250 - Interest Rate: 0% - Overdraft Fee: \$[/tex]35 per overdraft
- ATM Fee: \[tex]$0 for ABC bank ATMs, \$[/tex]3 for non-ABC bank ATMs

Given Vildur has \[tex]$800 to start with: - Interest earned: \( 800 \times 0 = \$[/tex]0 \)
- ATM fees for 2 transactions with ABC ATMs: [tex]\( 2 \times \$0 = \$0 \)[/tex]

Net balance in Bank B: [tex]\( \$800 + \$0 - \$0 = \$800.00\)[/tex]

3. Bank C:
- Minimum Balance: \[tex]$300 - Interest Rate: 0.02% - Overdraft Fee: \$[/tex]25 per overdraft
- ATM Fee: \[tex]$4 per transaction Given Vildur has \$[/tex]800 to start with:

- Interest earned: [tex]\( 800 \times 0.0002 = \$0.16 \)[/tex]
- ATM fees for 2 transactions: [tex]\( 2 \times \$4 = \$8 \)[/tex]

Net balance in Bank C: [tex]\( \$800 + \$0.16 - \$8.00 = \$792.16\)[/tex]

4. Bank D:
- Minimum Balance: \[tex]$100 - Interest Rate: 0% - Overdraft Fee: \$[/tex]25 per overdraft
- ATM Fee: \[tex]$3 per transaction Given Vildur has \$[/tex]800 to start with:

- Interest earned: [tex]\( 800 \times 0 = \$0 \)[/tex]
- ATM fees for 2 transactions: [tex]\( 2 \times \$3 = \$6 \)[/tex]

Net balance in Bank D: [tex]\( \$800 + \$0 - \$6 = \$794.00\)[/tex]

Based on this analysis, the net balances after considering the interest rates and ATM usage fees for using the ATMs two times a month are:

- Bank A: \[tex]$801.60 - Bank B: \$[/tex]800.00
- Bank C: \[tex]$792.16 - Bank D: \$[/tex]794.00

Vildur will have the highest net balance in Bank A, with a final amount of \$801.60. Thus, Bank A is the best choice for Vildur to open a checking account given his conditions.

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