Question

ahmad is comparing offers from two banks on checking - accounts that include debit cards. bank a charges a $2.25 monthly fee for a checking account and debit card, with unlimited transactions. bank b charges a $10 monthly fee for a checking account and debit card, plus $0.30 for each transaction. suppose ahmad makes 35 transactions in a given month. answer the questions below. (a) how much would he pay at each bank for the given month? bank a: $ bank b: $ (b) for the given month, which bank is cheaper and by how much? bank a bank a is $ cheaper than bank b. bank b bank b is $ cheaper than bank a.

Explanation:

Step1: Calculate cost for Bank A

Bank A has a flat - $25 monthly fee with unlimited transactions. So the cost for Bank A, $C_A = 25$.

Step2: Calculate cost for Bank B

Bank B has a $10 monthly fee plus $0.30 per transaction. If there are 35 transactions, the cost for Bank B is $C_B=10 + 0.30\times35$. First, calculate $0.30\times35 = 10.5$. Then $C_B=10 + 10.5=20.5$.

Step3: Compare costs

To find out which bank is cheaper, compare $C_A$ and $C_B$. Since $20.5<25$, Bank B is cheaper. The difference in cost is $25 - 20.5 = 4.5$.

Answer:

(a) Bank A: $25; Bank B: $20.5
(b) Bank B; Bank B is $4.5 cheaper than Bank A.