Question

Dillard's checking account charges a $13.25 monthly service fee and a $0.24 per check fee. if Dillard writes 18 check per month, should he switch to a checking account that charges $17.50 monthly service fee and no per check fee?

Answers:
A. No, because his monthly fees are currently greater than $17.50
B. Yes, because his monthly fees are currently lower than $17.50
C. Yes, because his monthly fees are currently greater than $17.50.
D. No, because his monthly fees are currently lower than $17.50

Answer 1

C. Yes, because his monthly fees are currently greater than $17.50.

Explanation:

To find out if Dillard will benefit from changing to a checking account that charges $17.50 with no per check fee, we first need to calculate how much he currently spends.

Since Dillard write 18 checks per month, we need to multiply that by $0.24 and add the total value to his current monthly service fee.

18 x 0.24 = $4.5

Now that we know how much he spends for all the 18 check a month we just add his monthly service fee to get his total amount.

$4.5 + $13.25 = $17.75

The other checking account charges $17.50 per month without a service fee, therefore:

$17.75 > $17.50

So Dillard with benefit from changing his checking account.