Answered

Karen has [tex]\$800[/tex] to open a checking account. She wants an account with the lowest fees. She only writes about five checks per month and her employer has direct deposit. She does not plan on using the ATM or online banking.

Bank Account Terms and Conditions

\begin{tabular}{|c|c|c|c|c|c|}
\cline { 2 - 6 }
\multicolumn{1}{c|}{} & \begin{tabular}{c}
Minimum \\
Balance
\end{tabular} & \begin{tabular}{c}
Online \\
Banking
\end{tabular} & \begin{tabular}{c}
Check \\
Limits
\end{tabular} & ATM Fees & Monthly Fee \\
\hline
A & [tex]\$500[/tex] & Yes & Unlimited & [tex]\$0[/tex] for all ATMs & [tex]\$5[/tex] \\
\hline
B & [tex]\$250[/tex] & Yes & 15 per month & \begin{tabular}{c}
[tex]\$0[/tex] for ABC \\
Bank ATMs
\end{tabular} & [tex]\[tex]$10[/tex] \\
\hline
C & [tex]\$[/tex]50[/tex] & Yes & [tex]\$0.08[/tex] each & \begin{tabular}{c}
[tex]\$2[/tex] per \\
transaction
\end{tabular} & \begin{tabular}{c}
[tex]\$0[/tex] with direct \\
deposit
\end{tabular} \\
\hline
D & [tex]\$100[/tex] & No & \begin{tabular}{c}
Over 10 \\
[tex]\[tex]$0.12[/tex] each
\end{tabular} & \begin{tabular}{c}
[tex]\$[/tex]3[/tex] per \\
transaction
\end{tabular} & [tex]\$2[/tex] \\
\hline
\end{tabular}

Which checking account would be best for Karen?

A. Account A
B. Account B
C. Account C



Answer :

GinnyAnswer
To determine which checking account would be best for Karen, we need to consider the following information:

- Karen has [tex]$800 to open the account. - She writes about five checks per month. - Her employer has direct deposit, so some fees may be waived. - She does not plan on using the ATM or online banking. Given the terms and conditions of each bank account, we can analyze the monthly fees for each account. We will calculate the total monthly cost for Karen, taking into account both fixed monthly fees and the cost per check. First, let's list the initial monthly fees for each account: - Account A: - Monthly Fee: $[/tex]5
- Check Fee: [tex]$0 (unlimited) - Account B: - Monthly Fee: $[/tex]10
- Check Fee: [tex]$0 (up to 15 checks per month) - Account C: - Monthly Fee: $[/tex]0 (with direct deposit)
- Check Fee: [tex]$0.08 per check - Account D: - Monthly Fee: $[/tex]2
- Check Fee: [tex]$0 (first 10 checks are free; $[/tex]0.12 per check over 10 checks)

Since Karen writes about five checks per month:
- For Account A, the monthly fee is [tex]$5 and there are no additional fees for writing checks. - For Account B, the monthly fee is $[/tex]10 and there are no additional fees for writing checks.
- For Account C, the monthly fee is [tex]$0 (with direct deposit), and the check fee is $[/tex]0.08 per check. Writing five checks would cost [tex]$0.08 * 5 = $[/tex]0.40.
- For Account D, the monthly fee is [tex]$2 and there are no additional fees for writing up to 10 checks. Since Karen writes only five checks, there are no extra charges. Let's summarize the total costs for Karen for each account: - Account A: $[/tex]5 (monthly fee) + [tex]$0 (check fees) = $[/tex]5 per month
- Account B: [tex]$10 (monthly fee) + $[/tex]0 (check fees) = [tex]$10 per month - Account C: $[/tex]0 (monthly fee) + [tex]$0.40 (check fees) = $[/tex]0.40 per month
- Account D: [tex]$2 (monthly fee) + $[/tex]0 (check fees) = [tex]$2 per month Comparing these totals, we find: - Account A costs $[/tex]5 per month.
- Account B costs [tex]$10 per month. - Account C costs $[/tex]0.40 per month.
- Account D costs [tex]$2 per month. The lowest fee is for Account C, which costs Karen only $[/tex]0.40 per month. Therefore, the best checking account for Karen is Account C.