Question

John has $1,234.56 in his bank account. He writes a check to pay his rent for $750.00, he then writes a check for $350.00 to pay his auto loan, he then writes another check to pay his credit card for $400.00 and lastly he writes a check to the DMV for $100.00. John's bank charges a $35.00 fee for every time overdraft occurs. How much will john have in his bank account after these transactions or how much will he owe the bank?

a $-330.44
b) $-365.44
c) $-400.44
d) $1169.56
e) $-435.44

Answer 1

John will owe the bank a total of $-470.44.

Step-by-step explanation:

To calculate how much John will have in his bank account after these transactions or how much he will owe the bank, we need to subtract the total amount of the checks he wrote plus the overdraft fees from his initial balance. Let's calculate it step by step:

1. John writes a check to pay his rent for $750.00, so his balance is $1234.56 - $750.00 = $484.56.
2. Then, he writes a check for $350.00 to pay his auto loan, so his balance is $484.56 - $350.00 = $134.56.
3. Next, he writes another check to pay his credit card for $400.00, so his balance is $134.56 - $400.00 = $-265.44.
4. Lastly, he writes a check to the DMV for $100.00, and his balance becomes $-265.44 - $100.00 = $-365.44.
5. John's bank charges a $35.00 fee for every overdraft, and since there were three overdrafts ($750.00, $350.00, and $400.00 checks), the total overdraft fee is $35.00 * 3 = $105.00.

Therefore, John will owe the bank a total of $-365.44 - $105.00 = $-470.44.