Question

In the past, Sam cashed his paycheck each month at Ready Cash, a check cashing service that charges a 5% fee. He recently opened a checking account at Bank of America so he can now deposit and/or cash his paycheck without a fee. If Sam is making $28,500 per year, how much will he save by not going to Ready Cash anymore?

a) $1,425
b) $2,850
c) $1,357.50
d) $2,142.50

Answer 1

Sam saves $1,425 annually by not using the check cashing service since he now has a bank account that does not charge a fee for cashing or depositing checks.

Step-by-step explanation:

If Sam is making $28,500 per year and he was using a check cashing service that charges a 5% fee, we can calculate the amount he will save by no longer using this service. To do this, we simply need to calculate 5% of his annual paycheck:

$28,500 x 0.05 = $1,425

So, by not going to Ready Cash anymore, Sam will save $1,425 annually. Therefore, the correct answer to how much Sam will save is option a) $1,425.