Answer :
To determine which bank account is best for Jana based on her financial habits and the terms provided, here is a step-by-step analysis:
1. Initial Balance and Monthly Balance:
- Jana's initial balance: [tex]$100 - Monthly balance she can maintain: $[/tex]300
- Therefore, her total balance available for consideration in any month is [tex]\( \$100 + \$300 = \$400 \)[/tex].
2. Bank Account Requirements and Fees:
- Account A:
- Minimum Balance: [tex]$500 - Interest Rate: 0.2% - Overdraw Fees: $[/tex]0 with linked savings or [tex]$40 per overdraft - ATM Fees: $[/tex]0 for all ATMs
- Monthly Fee: [tex]$10 or $[/tex]0 with direct deposit
Jana's total balance ([tex]$400) is less than the required minimum balance ($[/tex]500), so she would not qualify for Account A without facing monthly maintenance fees.
- Account B:
- Minimum Balance: [tex]$250 - Interest Rate: 0% - Overdraw Fees: $[/tex]35 per overdraft
- ATM Fees: [tex]$0 for ABC bank ATMs, $[/tex]1-[tex]$3 for non-ABC bank ATMs - Monthly Fee: $[/tex]0
Jana's total balance ([tex]$400) is greater than the required minimum balance ($[/tex]250), so she would qualify for Account B and would not face any monthly fees. She also saves on ATM fees if she uses ABC bank ATMs. This account looks promising.
- Account C:
- Minimum Balance: [tex]$100 - Interest Rate: 0% - Overdraw Fees: $[/tex]25 per overdraft
- ATM Fees: [tex]$3 per transaction - Monthly Fee: $[/tex]0
Jana's total balance ([tex]$400) is greater than the required minimum balance ($[/tex]100), so she would qualify for Account C and would not face any monthly fees. However, she frequently uses ATMs, and this account has a [tex]$3 fee per ATM transaction, which could add up for her. - Account D: - Minimum Balance: $[/tex]1000
- Interest Rate: 0.2%
- Overdraw Fees: [tex]$40 per overdraft - ATM Fees: $[/tex]2.50 per transaction
- Monthly Fee: [tex]$7 or $[/tex]0 with a linked savings
Jana's total balance ([tex]$400) is significantly less than the minimum balance required ($[/tex]1000), so she would not qualify for Account D without incurring additional monthly fees and potential fees for ATM usage.
3. Conclusion:
- Evaluating all the accounts based on her ability to maintain the necessary minimum balance, the risk of incurring fees, and the cost of ATM transactions:
- Account A is not suitable due to the high minimum balance requirement.
- Account C might incur significant costs due to her frequent ATM usage.
- Account D has too high a minimum balance requirement for Jana to meet.
Based on this analysis, Account B is the best option for Jana. It has no monthly fee, she meets the minimum balance requirement, and she can avoid ATM fees by using ABC bank ATMs.
1. Initial Balance and Monthly Balance:
- Jana's initial balance: [tex]$100 - Monthly balance she can maintain: $[/tex]300
- Therefore, her total balance available for consideration in any month is [tex]\( \$100 + \$300 = \$400 \)[/tex].
2. Bank Account Requirements and Fees:
- Account A:
- Minimum Balance: [tex]$500 - Interest Rate: 0.2% - Overdraw Fees: $[/tex]0 with linked savings or [tex]$40 per overdraft - ATM Fees: $[/tex]0 for all ATMs
- Monthly Fee: [tex]$10 or $[/tex]0 with direct deposit
Jana's total balance ([tex]$400) is less than the required minimum balance ($[/tex]500), so she would not qualify for Account A without facing monthly maintenance fees.
- Account B:
- Minimum Balance: [tex]$250 - Interest Rate: 0% - Overdraw Fees: $[/tex]35 per overdraft
- ATM Fees: [tex]$0 for ABC bank ATMs, $[/tex]1-[tex]$3 for non-ABC bank ATMs - Monthly Fee: $[/tex]0
Jana's total balance ([tex]$400) is greater than the required minimum balance ($[/tex]250), so she would qualify for Account B and would not face any monthly fees. She also saves on ATM fees if she uses ABC bank ATMs. This account looks promising.
- Account C:
- Minimum Balance: [tex]$100 - Interest Rate: 0% - Overdraw Fees: $[/tex]25 per overdraft
- ATM Fees: [tex]$3 per transaction - Monthly Fee: $[/tex]0
Jana's total balance ([tex]$400) is greater than the required minimum balance ($[/tex]100), so she would qualify for Account C and would not face any monthly fees. However, she frequently uses ATMs, and this account has a [tex]$3 fee per ATM transaction, which could add up for her. - Account D: - Minimum Balance: $[/tex]1000
- Interest Rate: 0.2%
- Overdraw Fees: [tex]$40 per overdraft - ATM Fees: $[/tex]2.50 per transaction
- Monthly Fee: [tex]$7 or $[/tex]0 with a linked savings
Jana's total balance ([tex]$400) is significantly less than the minimum balance required ($[/tex]1000), so she would not qualify for Account D without incurring additional monthly fees and potential fees for ATM usage.
3. Conclusion:
- Evaluating all the accounts based on her ability to maintain the necessary minimum balance, the risk of incurring fees, and the cost of ATM transactions:
- Account A is not suitable due to the high minimum balance requirement.
- Account C might incur significant costs due to her frequent ATM usage.
- Account D has too high a minimum balance requirement for Jana to meet.
Based on this analysis, Account B is the best option for Jana. It has no monthly fee, she meets the minimum balance requirement, and she can avoid ATM fees by using ABC bank ATMs.
