Question

Omar is comparing offers from two banks on checking accounts that include debit cards.

Bank A charges a $40 monthly fee for a checking account and debit card, with unlimited transactions. Bank B charges a $20 monthly fee for a checking account and debit card, plus $0.40 for each transaction.

Suppose Omar makes 40 transactions in a given month. Answer the questions below.

(a) How much would he pay at each bank for the given month?
Bank A:

Bank B:
(b) For the given month, which bank is cheaper and by how much?

Bank A

Bank B

Answer 1

the answer is as follows

Explanation:

(a)

Bank A: Omar would pay a flat fee of $40 for the checking account and debit card, regardless of the number of transactions he makes.

Bank B: Omar would pay $20 for the checking account and debit card, plus $0.40 for each transaction. For 40 transactions, he would pay:

$20 + (40 × $0.40) = $20 + $16 = $36

Therefore, Omar would pay $40 at Bank A and $36 at Bank B for the given month.

(b)

For the given month, Bank B is cheaper by:

$40 - $36 = $4

Therefore, Bank B is cheaper by $4 for the given month.