Question

Dana's checking account requires that she maintain a minimum balance of $1000 to avoid a monthly service fee, and her balance at the beginning of this month was $1096.03. If Dana's transactions so far this month have been a direct deposit of $613.72 on the 2nd of the month, a check written by Dana on the 5th of the month to her landlord for $700 that cleared the next day, and a cash deposit of $200 on the 8th of the month, has Dana been able to avoid the monthly service fee?

Answer 1

Yes, because her lowest balance so far this month has been 1009.75.

Answer 2

Given:

Dana has to maintain a minimum balance of $1000 to avoid a monthly service fee.

Her balance at the beginning of this month was $1096.03.

Dana's transactions in this month has been a direct deposit of $613.72 on the 2nd of the month, a check written by Dana on the 5th of the month to her landlord for $700 that cleared the next day, and a cash deposit of $200 on the 8th of the month.

To Find:

Whether Dana has to pay the monthly service fee.

Answer:

Dana's account balance did not go below $1000 at any point in the month, so she will not have to pay the monthly service fee.

Explanation:

Dana's balance at the beginning of the month was $1096.03.

According to the question, Dana's transactions involve

1. a direct deposit of $613.72
2. a rent check to her landlord of $700
3. a cash deposit of $200

After the first transaction (the direct deposit), Dana's balance would be $1096.03 + $613.72 = $1709.75

Next, after the rent check, Dana's account is debited with $700. So, her account balance will now be $1709.75 - $700 = $1009.75

Finally, after the cash deposit of $200, the account balance is $1009.75 + $200 = $1209.75

So, as Dana's account balance has not gone below $1000, she will not have to pay the monthly service fee.