sharon wants to open a checking account from which to pay bills. she wants online services, and a debit…

sharon wants to open a checking account from which to pay bills. she wants online services, and a debit card, which both banks provide for free. based upon past experience, she expects to accidentally over - draft the account 1 time per year, due to unexpected charges and miscommunications. she expects no 2nd copies of statements, and to use network atms 4 times per month with either bank. she has $3300 in an emergency savings account at first state bank, and thinks that the balance will be enough to cover over - drafts in the future if automatic transfers are made when needed.\n\n|first state bank| |common bank| |\n|--|--|--|--|\n|feature|description|feature|description|\n|monthly fee|$4|monthly fee|$0|\n|non - sufficient funds|$36|non - sufficient funds|$24|\n|2nd copy of statement|$7|2nd copy of statement|$4|\n|network atm usage|$3 each transaction|network atm usage|$2 each transaction|\n|non - sufficient funds protection from a first state bank savings account|$4 on each day that a transfer occurs to cover an over - draft|non - sufficient funds protection from a common bank savings account|not offered with this account|\n\nbased on the tables of fees, above, if sharon chooses first state bank, will it save her money over choosing common bank?

sharon wants to open a checking account from which to pay bills. she wants online services, and a debit card, which both banks provide for free. based upon past experience, she expects to accidentally over - draft the account 1 time per year, due to unexpected charges and miscommunications. she expects no 2nd copies of statements, and to use network atms 4 times per month with either bank. she has $3300 in an emergency savings account at first state bank, and thinks that the balance will be enough to cover over - drafts in the future if automatic transfers are made when needed.\n\n|first state bank| |common bank| |\n|--|--|--|--|\n|feature|description|feature|description|\n|monthly fee|$4|monthly fee|$0|\n|non - sufficient funds|$36|non - sufficient funds|$24|\n|2nd copy of statement|$7|2nd copy of statement|$4|\n|network atm usage|$3 each transaction|network atm usage|$2 each transaction|\n|non - sufficient funds protection from a first state bank savings account|$4 on each day that a transfer occurs to cover an over - draft|non - sufficient funds protection from a common bank savings account|not offered with this account|\n\nbased on the tables of fees, above, if sharon chooses first state bank, will it save her money over choosing common bank?

Answer

Explanation:

Step1: Calculate total annual fees for First State Bank

Monthly fee: $4\times12 = 48$. Over - draft fee: 36. ATM fees: $3\times4\times12=144$. Total for First State Bank is $48 + 36+144=$228$.

Step2: Calculate total annual fees for Common Bank

Monthly fee: $0$. Over - draft fee: 24. ATM fees: $2\times4\times12 = 96$. Total for Common Bank is $0 + 24+96=$120$.

Answer:

No, choosing First State Bank will not save her money as the total annual fees for First State Bank ($228) are more than the total annual fees for Common Bank ($120).